Tag Archives: Windows Azure

The App Economy – How should we view app monetization?

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The blogosphere is all about apps and how different ecosystems compete for the eyeballs of these and the money of course. You might still remember the the news when a far app pulled as much as $10,000/day in revenue but since then there is tens of similar applications on the marketplace. This started a trend where people left their well-paid jobs to chase their dream of creating apps and living a life without pressures. The growth of app economy is one of the most promising trends, but people/organizations that want to make real money of it, need to include some risk management into it as well. The app industry has become similar to film industry where relatively few people make money and the ones that make, are hugely successful like Angry Birds phenomenon from Finland.

One might of course ask oneself is whether this is a shift in our society and how work is performed. according to Erik Brynjolfsson (director of the M.I.T. Center of digital business), “technology is always destroying jobs and always creating jobs, but in recent years the destruction has been happening faster than the creation”. There is no question that technology is creating new jobs and apps can be part of this opportunity as can be seen in many of the reports that have studied this trend towards “app economy”.

What I have not seen many discussions around is how the app economy is linked with the enterprise software business. I have researched around this and identified the “dimensions” that are typically linked to the app business, but not that much is said how established software vendors should view this space and how these vendors can make a entry to the app space in a way that makes sense and where there is also a sustainable economical model.

So, the question that we should ask ourselves is how much of the app business is truly geared towards the consumer business and how much of this will gradually move into enterprise business? Should software vendors keep the app business in their plans when building enterprise solutions specifically using the cloud? If they should keep this in mind, what kind of pricing should the ISV use? Maybe free as the real money comes from the enterprise solution and not the app that accesses it? As you can see, it is not that clear and my own experience when working with both small and large enterprises, the app business hardly ever comes up in discussions. I am convinced that this will change and it will change very quickly. One of the drivers will be Windows 8 and Windows Phone 8 developers that will create solutions that will be based on app technology and not on traditional desktop app architectural model even if these will be able to run in Windows 8 Pro environment.

Another valid question that we need to ask ourselves is whether app economy should be see purely from mobile app development perspective or should we view it from a perspective where the device is just the means to get to what you want and the backend (typically the cloud) is the one that provides the services and brokers the interaction between different services. Shouldn’t we in fact be talking about services economy instead where organizations build apps to consume and combine information from different sources using different SOA interfaces that organizations/developers have exposed to the world. Isn’t this what we have always dreamt about?

NokiaExpressI downloaded today a Windows Phone 8 app (Nokia Xpress) to my shiny Nokia Lumia 920 and this app really demonstrates where things are going. After having installed the app, it asked me whether it can use location information (which most apps want to use), but what really made me to think about the future of apps is that developers really have to think “outside the box” on when developing apps. The thing with this Nokia Xpress app is that it enables users to store and read articles on your phone (locally) so when you travel, you do not have to use expensive data roaming. I know.. there are many of these apps from before, but what this app has specifically thought of is to really monitory and minimize data usage and provide a combination of technology such as Microsoft SkyDrive technology to store videos and images without having to use the data plan. Why is this relevant to me? Just this week, my son’s data plan was going over the limit and I found out that it was all about video streaming and 2 gig data plan does not cope well with this.

The topic of “app economy” is very interesting to me as researcher, but also as practitioner. A recent paper written by Dr. Michael Mandel and Judith Scherer (commission by CTIA (The Wireless Association) and Application Developers Alliance provides an interesting view on the app economy. According to Mandel, the entire “App Economy” was coming to use in early 2009 and was popularized by a cover story run by BusinessWeek in November 2009.

The way that Dr. Michael Mandel describes App Economy in his February 2012 report resonates well with what I have educated my customers in respect to ecosystems:

“ App Economy is a collection of interlocking innovative ecosystems”. Each ecosystem consists of a core company, which creates and maintains a platform and an app marketplace, plus a small and large companies that produce apps and/or mobile devices  for that platform. Businesses can belong to multiple ecosystems and usually do”.

There is no question in my mind that this topic is relevant to anybody that works in the software industry and it is fascinating to see how this evolves with time and what kind of new companies will rise to take advantage of this.

If you work in the Microsoft ecosystem, I highly encourage you to read the article “Microsoft’s cloud vision: Why Azure is the linchpin of the firm’s new devices and services strategy”. Another great article from Information-Management.com that predicts Enterprise Apps to go mobile big time and that money apps will move to the cloud. The article lists quite a few things that are very interesting and I encourage you to read that article as well.

Stay tuned for more, there will be more to come on my research on different topics and this app economy being one of them!

Why software is still relevant and even more so going forward

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When I reflect my past more than 20 years, I have been fortunate enough to be part of the software industry on a global level. First 10 years I spent in Europe working for software companies and the past 15 years I have lived and worked in the US as entrepreneur helping out software companies both domestically and internationally to expand their business.

I happened to run into a blog entry from TechCrunch by Jon Evans where he reflects on Journalism and how everything has become tech. The reference he makes is to a blog entry with the topic Software is eating the world  and is written by  Marc Andreessen whom most of us know already from the Netscape time. Marc Andreesseen is co-founder and general partner in a very well known venture capital company Andreeseen Horowitz with investments in many well known companies such as Facebook, Groupon, Twitter and many more…

When you read the article from Andreessen, there are a few things that confirms some of the things that I have pondering on and also telling my software vendor clients in discussions. Software has not only become a necessity, it has become a must even for traditional hardware companies that one would not think that they need to ponder about software. This trend has been going on for a few years and we see this happening in the for example auto industry and what makes things even more exciting is that cloud technology is now part of this formula of success. Some mature industries are using new cloud technologies to achieve competitive edge towards the rest of the industry.

There are software companies such as MetaCase that will benefit of this trend. This software development tools company is the leading domain-specific modeling software company in the world that has very impressive clients working on embedded software solutions in different industries, including mobility and auto industry. The development environment MetaEdit+ enables organizations to create software product lines more effectively and also with higher quality.

Andreessen claims that we are in the midst of a huge and dramatic technological and economic shift where software companies are poised to take over a large part of the economy. It is easy to see this happening for real. Just think about how insurance companies and financial industry are able to use the cloud to execute heavy-duty risk calculations by submitting the request to the cloud and the only question that the cloud will ask is how much time it can take. Following picture shows pretty nicely how a company with pre-existing infrastructure investment (Datacenter) should view when considering a PaaS environment (Platform-as-a-Service) and in the figure we are referring to Windows Azure.

Azure vs. datacenter

The more capacity is allocated for the calculation, the more it will cost but this cost could easily be justified by opportunities to make more money due to time savings. In the picture above, it is easy to see that there will be a point in time when your own datacenter just does not scale where it needs to scale and that is why solutions/platforms such as Windows Azure will come to the play. This is also why we have to understand that new technologies such as cloud will bring new innovations to the market and this will definitely reflect on the valuations of these companies.

Andreessen gives lots of software related examples from different industries and I have had the luxury to work with many new an innovative (small and large) software companies that are now making this change in a very rapid pace. There will be lots of losers in this game as well. These will be the ones that feel that they already “own” the market and suddenly realize that smaller and more nimble players suddenly take the market and run with it.

The message that I want to send with this blog entry is to really emphasize that ignoring the change that is happening due to multiple factors such as mobility and cloud is probably one of the biggest mistakes that one can make as software leader. I encourage each one of you to do some due diligence in your own operations and answer to this simple question: “ will I still be relevant in 5 years”. If the answer is no, then you might have bigger issues on your hands than just the cloud transformation.

DrSalonen WordPress site is now running natively in Windows Azure environment

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One of the benefits of having some down-time due to holiday season is to be able to do more of things what you can’t do when you are in full swing with work. For me this has meant throughout my career that I do research, write books, study technology or do things when I am not distracted from different things. Now I am listening to the wonderful Swedish singer Eva Dahlgren (got a CD from my wife as Christmas present) and writing this blog entry in late Dallas evening.

Azure-website-001What makes me very excited about this transfer of my WordPress site is that I wanted to upgrade the WordPress platform and get myself ready for 2013 where I will start making blog entries of my experiences that I have gained during 2012. It is time for me to start working on text again as it is already 2 years since I published my latest book. However, due to the projects in the cloud transformation, it has been so fascinating to learn new stuff so I am OK even if I have neglected the writing for a while.

Stay tuned for blog entries during 2013 and later today I will post some of my experiences in this transfer of my WordPress site from a private hosting site to Windows Azure environment.

Cloud ISV: Do not focus on building infrastructure, but focus on building value add for the end user

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Software developers love to challenge themselves with things that make them feel good and the trickier the problem, the merrier it is to find the solution. In some cases, this could obviously be the killer innovation that nobody else has ever done, but if it is something that already exists and can be purchased from a third-party organization, it is waste of time and money to rebuild something that is already available. Do you remember the saying “ it can’t be good as it was not invented by us?”. I do remember vividly and have been the witness multiple time during my career.

Ten years ago software developers had to work on basic infrastructure before getting the solution built, but today, the focus should be mostly on innovating and assembling solutions that bring something new to the marketplace. I still see SaaS ISVs to claim that they need to build a billing solution as part of the solution, but there is plenty of other solutions already on the marketplace that do that well an can be integrated to the overall solution scenario.

I happened to view Microsoft Windows Azure homepage today to see if there was something new and was very happy to see the homepage to include the same statement that I am bringing here: “Focus on your application. Not the infrastructure”.  A good place to start looking at other SaaS components/solutions is to visit Windows Azure marketplace that includes listings of different solutions that the ISV can use as part of their solution delivery. If you are a system integrator, you should also spend time understanding what the software ecosystem has to offer so you can become a trusted advisor to your clients.

I do recognize that in some cases there is a need to build “glue” components that can be regarded as infrastructure components, but at the same time, the ISV needs to realize that those components will be replaced by commodity software whereby the original solution needs to be reengineered in some way or the other. In the past, as a leader of a software development team, we had to spend lots of time creating infrastructure for our solution to even work. I used to be the lead for several business intelligence solutions and at that time, there just weren’t enough components or infrastructure that would take care of the basic functionality. I still remember vividly our fight in going from 16-bit Windows to 32-bit technology and we had to support APPC communication between the mini computer and the Windows desktops.  The bad news was that IBM decided to redo most of the router software with a pace that we as an ISV had really hard time to follow and we run into pressure from our clients to upgrade our 16-bit technology.  You typically do not want to be the first one on the planet to test new technology, but in this case we did not have a choice. We spent multiple months “running against the time” when trying to get our solution to work with the latest Windows router technology and it was not fun and it was very expensive.

I mentioned that SaaS ISVs should look at other SaaS solution to bring functionality as billing and organizations such as Zuora, Inc is an example of an organization that brings subscription billing and commerce platform that can be used by other SaaS vendors.

My message to cloud ISVs is simple: learn your cloud ecosystem, learn what there is that you can consume as part of your solution and focus on innovation on the solution and not on the infrastructure.

Software solutions we are using on a daily basis when running a consulting business with people distributed in different parts of the world

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I get questions from other entrepreneurs what software we are using to run our business and it has been my intention for a while to create a blog entry about this and I finally got to do it so here it is.

I founded TELLUS International six years ago after having been part of a software company exit (sales of a software business intelligence company). When founding TELLUS, I made a firm decision not to invest any money in hardware which forced me to select solutions that would run as a cloud solution (SaaS).  This was a pretty bold statement back in 2005 as the cloud really became reality and part of “accepted” much later and there really wasn’t that many SaaS solutions back then.

Throughout this blog entry, you will see that solution integration plays an important role when running a business. Integration is by far the most important thing that an organization should pay attention to. You do not want your personnel having to re-enter things to many applications, the focus should be on sharing information across different applications. For us, Microsoft Office Suite with Microsoft Word, Excel, PowerPoint, Project, OneNote etc. are obvious selections for the office productivity tools but all fo the data and documents have to live in the cloud.

There are some applications that are better suited to run as desktop apps with the ability to save data to the cloud and therefore I really see a hybrid model to be the case in many solution areas and I have some examples of this later in this blog entry. If we work in Microsoft Word, the document will be saved a cloud vault so nothing will be lost even if the laptop/desktop fails or hard drive goes bad. In our case, M-Files document management solution was the right choice due to many reasons that I explain later in this blog entry.

Let me start this journey by working through each operational area where software is needed. I will start by looking at company accounting as that is what is usually needed immediately after the company has been created. You could potentially keep your books using Microsoft Excel (I have seen this happening as well), but I decided to base my company on a real foundation from get-go and Excel was not the solution for TELLUS accounting and was not cloud based either.

Accounting in the cloud back in 2005

Back in 2005, the only real SaaS vendor for accounting was Intuit with QuickBooks Online and that is what we have been using from get-go. I had exposure to QuickBooks Online already before 2005 when I was running a business intelligence software company so I knew what I was getting myself into. The reasons why we went initially to QuickBooks Online from regular QuickBooks was due to the need to share financial information with the headquarters in Finland. A SaaS solution enabled any user get immediate access to the books. What a great concept and Intuit was the first one to get a SaaS solution to the marketplace.

The benefits of having accounting in the cloud are many such as:

1)      I can have my CPA review on my books anytime, anywhere without me having to worry about hardware or software to be installed.

2)      I can generate invoices and have people to enter their time for billing purposes just using the browser

3)      With the mobility era coming even stronger, the mobile interface to QuickBooks Online are getting even better what it is today.

Communication tools with the external world

As a Microsoft partner it was very natural for us to select Microsoft-hosted Exchange environment for our email needs. We have been using Microsoft-hosted version since it came out and could not be happier. The environment supports different types of mobile devices as well and which is the reality of many organizations today. The days when everything was standardized into one specific device are gone.

Document Management Solution – Getting documents and workflow processes into control

A key part of any consultancy is to standardize how documents are managed, where they are saved and what type of workflow processes are attached to different document types. During the past six years we have tried many solutions and luckily I was able to find something that not only made sense to the users, but also supported my vision of having a cloud-based solution for our document management. The solution is M-Files with Windows Azure backend (storage) and a small plugin that enables fully integrated user experience when working with Microsoft office environment. Let me explain what I mean by fully integrated document management experience.

First of all, the end user does not have to think about document management when using M-Files.  M-Files is like a drive on a laptop/desktop with the difference that the user does not have to worry about directories or file naming when saving the document to the M-Files Azure repository. The user is presented with a metadata card that includes information for that specific document type (document class) and this is much more meaningful to the user as everything then becomes searchable and structures can be changed without really having to think about directories. How many times have you wondered where you saved a document and whether the document is the last one that has been touched? According to some studies, a document exists on average 19 times in a typical corporate environment. What a horrible way to spend money and time for nothing.

In our case, we have also integrated M-Files with Dynamics CRM 2011 Online environment with full two-way synchronization. What this mean in practicality is that all customer names and contacts are automatically synchronized from Dynamics CRM 2011 Online to M-Files Windows Azure repository. The synchronization is two-way where any change in M-Files is automatically synchronized back to Dynamics CRM 2011.

The reality is that all of us use Microsoft Office as the main environment when working with documents and what M-Files brings to the table is a native plugin to each one of these apps, including Microsoft Outlook: each application has a button to save the document to the M-Files Azure Document Vault and that is very powerful. Nobody in the organization has a need to explain that he/she does not have time to save documents, because the effort is in fact less as the document metadata card is automatically driving the saving process.

We also use the workflow engine in M-Files to drive our approval processes in proposals which is important to keep the quality high on the documents that are sent to the prospects.

If you reflect on the text above about how we integrate things within our organization it is easy to say that M-Files is almost like the traffic controller sitting in the middle and documenting what we are doing. We have seen many organizations with disintegrated applications with lots of re-entry of data and that is not only useless but also frustrating to the end users.

On top of the integration capabilities between M-Files and other operational applications on the metadata and metadata related records, any document that flows through any of the employees will have metadata associated to it and any document will have full support to audit trail as well as company/contact information associated to it. M-Files enable organizations also to integrate the solution into ERP/accounting database whereby M-Files really becomes the central hub for any information flow.

Sales and Marketing in the Cloud

Salesforce.com is a pioneer in SaaS-based sales force automation solutions, no question about that. Back in 2005 when I had made my decision to only use SaaS based solutions, I had to go with SalesForce initially but we agreed in the management team that once Microsoft comes with its own SaaS-based solution, we would convert to Dynamics CRM Online. We did exactly that with the Dynamics CRM Online that Microsoft introduced to the marketplace. I am glad that I did this transition. With the new Dynamics CRM 2011 Online release, the third-party market was given the opportunity to create add-on applications whereby the use of the CRM could be extended to new functional areas.

A key element in our CRM use is a Microsoft Outlook plugin from a company called Linkpoint360 that enables us to save emails either to Account/Contact or Lead contacts. What makes this different to the very effective native tracking in Dynamics CRM is the easiness to flag things to the database. It is just one click “Record to Microsoft CRM” and you will be presented with a dialog box where you can select how you want to save it and if you want to add a follow-up action on the account/contact/lead. This solution is one of those things that you can view as a “non-brainer” and I would highly recommend to test it out and you will see that the money you pay for it is worth and the return on investment from productivity perspective is just ridiculous.

Another related technology to CRM use is marketing and email automation and we made a decision to use CoreMotives Marketing Suite that has a native Microsoft Dynamics CRM 2011 Online solution that enables tight integration to the CRM use. What it really means is that the CRM becomes “the place” to go to for everything. When we send out emails as part of the campaign, everything will be tagged inside the CRM and the analytics will give us a 360 degree view of how the campaign has progressed, how many reads the campaign message has had and what type of actions the user has taken. Very effective and what makes it also interesting is that Coremotives uses Windows Azure as the backend for the solution which is obviously something we like ISVs to do when building solutions. That is part of TELLUS educational series when making selections of technology. This is exactly the same technology that M-Files is using as it backend cloud technology.

As our business model is to work with Independent Software Vendors (ISVs) and Systems Integrators (SIs) we depend on our marketing and sales process as we apply this to both channel building for our ISV clients, sales to end user organizations but also to market our services to prospective ISVs and SIs.

With M-Files integration to our Microsoft Dynamics CRM 2011 Online with LinkPoint360 and CoreMotives we have a fully integrated lifecycle management of our entire marketing/sales process.

Research tools

My life is about research and writing and part of this process I have had to search and pick the best tools for this work. When you think about the process that one performs in research, the internet with search engine becomes one of the most important tools. The question now becomes where you save all of those links that you might need, the regular “favorites” folder in an Internet browser just isn’t enough. I ended up by selecting Microsoft OneNote 2010 as the most important tool for me to collect data and this has become invaluable to me in everything I do. Besides Microsoft OneNote, I also use mind mapping tool from Mindjet to plan and categorize things as I explained further down in this blog entry. The main tool for any of my writing is Microsoft Word 2010 that has been the foundation for two of my latest books and the third one I am working on.

Other productivity tools

Besides the operational tools that I explained above, we use a few other very handy tools when working on projects.

Graphical tools

One that has become a key and core software solution for me is Snagit from a company called Techsmith. Snagit enables me to grab anything from my current screen and reuse that image in my presentations or documents that I am authoring. Snagit has really become a core tool in any work that I do.

Mindmapping tools

Another application is a mind mapping software MindManager from Mindjet. We have used mind mapping in all of our research projects as it gives a nice overall view on the information that you are trying to portray. This has been extremely useful in our influencer intelligence studies that we have worked on during the years.

We started by using the Windows version of Mindjet, then signed up for the SaaS-based version of Mindjet called Mindjet Catalyst but realized pretty soon that it was not able to scale to the mind maps that we were building so we discontinued the use of the SaaS solution. I believe that the horsepower that this type of application takes is not really suited for a pure web-based solution seen from a usability perspective.

Presentation tools

The key presentation tool for our TELLUS workshops and events is Microsoft PowerPoint 2010. For the online video presentation we use Camtasia Studio Screen recording & Video Editing software from the same company Techsmith that is the creator of Snagit software. This software enables us to record PowerPoint slideshows with voice/and video capture with lots of different output options for different devices.

Scanning software for business cards

One of the key tasks that I do after a conference or having met a person is to scan the business card by using Dymo Cardscan 800c device with its embedded software. I have been using this technology for years, but unfortunately since it was acquired by Dymo, I have seen no developments for the software or integration to other solutions such as Microsoft Dynamics CRM 2011 Online environment. They have their own SaaS environment where you can synchronize the cards from the desktop software but that environment does not have any other integration possibilities so it remains to be seen how long I keep using this package. Once somebody invents or creates a solution that integrates well with Microsoft Dynamics CRM environment, I am ready to move over.

I will add new tools/software by updating this blog entry and in future blogs I will go in more detail to explain how each of these tools are used from a practical sense in our daily lives. I would love to hear what other tools you are using and also the use cases behind them.

Cloud as foundation for innovation: Are you willing to take your company outside your own comfort zone when innovating products?

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I got the burst and desire to write this blog entry after having read an article about Microsoft and Toyota forming a partnership to develop new IT-based services for electric vehicles when to recharge. Think about it. In the future, the cloud will become the place that connects devices and vehicles and if this is not an opportunity for ISV’s, what is? Also, when you add mobile solutions to this formula of the cloud, you have something that can become big and create a new market for the ISV.

I will never forget the day when I was sitting in an advisory panel with other software executives when one of the participants from a large software company suddenly said with a loud voice to the entire group: you are looking at your business inside the box, not from outside. That was the first time when I had a real wakeup call how the cloud can change not only our lives, but also how products are innovated and how we can make a difference with software.

The cloud has unfortunately lots of hype around it, but many Independent Software Vendors (ISV’s) such as M-Files (Motive Systems) has taken Microsoft Azure as an enabler of new opportunities and not just as an “object for migration”. M-Files is the first Document Management Solution that is built using Windows Azure as the foundation with tens of thousands of users around the world. Windows Azure provides a scalable and robust platform for an ISV to build solutions that can be distributed around the globe.

Anybody can migrate to the cloud, but the winners are the vendors that really look at the current business model and make something bigger of it like what M-Files decided to do. As a software vendor, M-Files will rely upon Microsoft to build data centers and infrastructure to these centers and the role of M-Files will be to innovate on top of this infrastructure. Windows Azure and SQL Azure are part of a Platform-as-a-Service environment (PaaS), but without an application Windows Azure is just infrastructure and there is nothing that you can do with it. Microsoft relies on Independent Software Vendors (ISVs) to build applications that can then be deployed to the Azure cloud and be part of the Windows Azure Marketplace or Windows Azure DataMarket with the possibility to accelerated sales. Other solutions such as Dynamics CRM 2011 Online are positioned to another category (SaaS) and can be consumed “as is” or by customization by the company or a System Integrator (SI).

ISV’s are living in turmoil. Some of them have built solutions for years with an architectural model that will be hard to move to any cloud infrastructure even if there was a desire. There are many alternative ways to make the transition, and one of them is to do a gradual move by building extensions that utilize the cloud and this gives the ISV the taste of the cloud and what it really is to develop to that environment. Sometimes the architectural model just is meant to be for the cloud and those are the lucky ones that are typically in the minority.

Having travelled the world, having seen hundreds of ISV’s, I am convinced that the ones that do not even have a transition plan will have huge issues going forward. I have analyzed the situation from System Integrator (SI) and Independent Software Vendor (ISV) perspective and I have to say that both groups will benefit from the cloud if positioned correctly. The former can serve the latter in the transition and the latter should be thinking and innovating outside the box. Think big, do not think about migration, but think about things that you were not able to do in the past that you can do now. Ulf Avrin provides advice in his blog entry in the transitioning to the cloud and what types of changes one can expect in the transition.

Do you have a transition plan in place and are you going to benefit of the cloud?

Former Nokia CEO Kalle Isokallio is wondering about the fuss in Finland concerning Nokia and Microsoft collaboration

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In today’s Finnish Iltalehti, the former CEO of Nokia Kalle Isokallio criticizes both Finnish politicians as well as other critics that do not see the opportunity of this new partnership that Microsoft and Nokia has created. Isokallo wonders how all these skilled Symbian developers would be worse off when given modern and more productive software product development tools when compared to that of Symbian’s. He uses a metaphor in the comparison between Symbian and Microsoft development. Assume that you are building house. Which tool is better: a Leatherman knife or axe and chainsaw. With the first one you will end up with a house eventually, but with the latter, you get results much quicker as your productivity is better.

Isokallio also wonders whether he is the only one in Finland that sees this as an opportunity and wonders why politicians and labor unions refuse to see the bright side of this. Nokia did not have a future the way they were going, and this new path gives all Symbian developers, the ones that want it, a new future.

I think Isokallio brings a valid perspective to the wild discussion in the Internet about the pros and cons of this new partnership. Isokallio concludes that the future is less about hardware, but the ability to provide one consistent view to the application that is consumed from the web. Consumers are no longer willing to have different user experience between different devices if they use the same application and I have to agree on this. If a billion consumers use Windows as the operating system, doesn’t it make sense to have a consistent user experience with a mobile device that looks and feels that same. I think it does.

Also, what I did not think about before was that maybe Nokia will be the one providing the tablet experience and hardware, not Microsoft. I think we can expect to see a Windows tablet from Nokia, the only question remains whether it is the upcoming Windows 8 or Windows Phone 7-based tablet. My guess is the first one.

Isokallio also concludes that the relationship between Nokia and Microsoft has something that Apple does not have and that is the cloud as I also concluded in my prior blog entry . Nokia now has access to one of the largest cloud vendors (Windows Azure) in the world and all of the developers that build solutions to Windows Phone 7. That did not exist with the Symbian development environment. Visual Studio provides tight integration to Windows Azure and Windows Phone 7 (out –of-the-box) so developers can focus on building the solution, not supporting infrastructure.

Microsoft has something that Google does not have and that is an operating system that everybody uses. Yes, Google is working on its own Android operating system, but if a billion consumers use Windows today, that is where the market is for time being. Google has the cloud but users will still want to use their productivity tools and provide seamless integration between different devices.  Apple has its operating system and iPhone and tablet (iPad), but the market share of iOS is still very low in enterprises.

Finally, Isokallio concludes that the ridiculous amount that Nokia paid for Navteq (5,7 billion Euros) might not seem so ridiculous anymore when the technology is combined with Bing technology. Bing market share has increased considerably and Microsoft is eating into Google’s market share and profits. Recently, there have been reports that Bing search results are even more accurate when compared with that of Google’s. I think that is irrelevant as of now. What is relevant is who provides a consistent user experience in business and personal lives and Microsoft has a new chance doing this with its Windows Phone 7, Zune, xBox 360,  Windows Live, Office Live and other similar services that will be integrated.

I really enjoyed Isokallio’s article (in Finnish) as he brings valid points to the discussion and his background as Nokia’s CEO gives him some perspective and validity to his opinions.

Do you agree what Isokallio is saying?

Nokia and Microsoft from a partner-to-partner (p-2-p) perspective to achieve a vibrant ecosystem: recommendations for Microsoft and Nokia partners

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Disclosure: I am a former global Chairman for International Association of Microsoft Channel Partners (http://www.iamcp.org) that according to IDC 2009 study had $10,1 billion in partner-to-partner business. My views might be biased due to two factors: I am a Finn living in the US and earn 100% of my revenue from the Microsoft ecosystem. This blog entry is about the possibilities for Microsoft and Nokia, and not about the past mistakes that might have been made.

The much speculated announcement from Nokia and Microsoft is now reality. Nokia and Microsoft have announced a new strategic partnership to build a new global mobile ecosystem. This news item has been dwelled in the cyberspace such as PCMag.com, blogs such as Mary-Jo Foley All about Microsoft and some newspapers such as Financial Times questioning whether Elop is the right person to lead Nokia. The rumbling of Nokia’s strategy accelerated to full force after Stephen Elop’s internal memo was leaked to the public. This memo included strong words about Symbian and how it was burning and it was time to jump ship. I have commented on Nokia in some of my previous blog entries but today and going forward, I am going to focus on future possibilities and not dwell on the past as this does not bring anybody any good.

This announcement from Microsoft and Nokia is not just a major and dramatic shift for Nokia, but also for the entire Finnish business ecosystem. Based on the Finnish news sources, this is the biggest change that Finland has seen in the technology landscape since the changes that took place in traditional industry such as forest, metal and shipbuilding. I feel sorry for the thousands of Nokia employees and hundreds or even thousands of companies that have earned their living from Nokia and its ecosystem. I have in fact been Chairman of the Board for one company and Nokia was a very important source of living for the company. However, each and every one of us has to admit that this did not happen overnight, the writing was on the wall and Stephen Elop just happened to be the one that had to make this change.

I have been tracking the discussions in the cyberspace and this announcement has caused emotions, both negative as well as positive. I believe that Nokia to Finland is like Volvo for Swedes and  it has to do with national identify and when that gets threatened, people react in different ways, some probably without really thinking about the consequences of what they say, and some more realistic and with the future in mind.

I have had a chance to track the evolution of Nokia story from a US perspective during the past 13 years and I have to say it has been depressing to see Nokia and the Nokia brand sink among US consumers and businesses. Already a few years ago it was almost impossible to find a nice Nokia phone in local AT&T store and this should have been a sign already then that something was wrong. One could argue that the current Chairman of the Board Jorma Ollila should have seen the signs on the wall when he was the CEO or at the very latest during Olli-Pekka Kallasvuo’s tenure. He did not, or if he did, the board and the management team did not take the risk of changing the course.

The current Nokia CEO Stephen Elop was the one that was forced to stop the bleeding of Nokia’s market share in the smartphone space and he is now the one that is taking the heat from the press and industry analysts. I do not think it is fair to put this on his shoulders as Nokia has had ample chances to change the course during the past few years or at the very latest when the first iPhone was released in in 2007.

When I saw the Meego leader Ari Jaaksi leave Nokia a few months ago to lead HP Palm software to become senior vice president of WebOS, I smelled problems in the future of Meego. This is obviously bad news for the companies that have invested in Meego development and future, but that is unfortunately nothing new in the technology field. During my career, my company had to invest in APPC communication protocol development that nobody remembers today. Nobody asked me how I felt when APPC was replaced with TCP/IP.

Once the companies and Nokia employees that have put their lives into Symbian and application development around Symbian have spent some time to reflect what they want to do going forward, I would like to encourage them to view Microsoft as an opportunity for them to change direction and get really to become a part of Microsoft huge 600k plus partner ecosystem. That is what we entrepreneurs do all the time. We have to review our business model, its robustness and change it when needed. We will never let outside forces let to drive our future; we need to be in charge of it. If your current revenue model is 100% from Symbian, you are the one responsible for it and you can’t blame Nokia or Microsoft for it. Running a business on one horse is both stupid and risky and not good for shareholders. In some cases it can reward you, but in some other cases it can also take you down. You have to be on watch what happens around you and the day when you start ignoring the outside world, things start falling apart and this is exactly what happened to Nokia.

I have seen some misrepresentation in some blog entries that Microsoft would not be partner friendly which is a misrepresentation of huge measures. Microsoft partner network generates more than 90% of Microsoft annual revenue. Bring me another company that would do that with its partners. Microsoft has of course individuals that might in some cases have hurt some partners, but overall Microsoft has a strategy to work with its partners, not against its partners.

When I look at the Microsoft ecosystem and what is happening today from a technological perspective the cloud and the mobility are the two current topics that everybody seems to be talking about. Look at what is happening with our youth. They assume to be able to consume services from the cloud and they are born with smartphones and know how to utilize them effectively by using messenger and SMS. What does this mean for Microsoft and Nokia? Microsoft has more than 30.000 Windows Azure clients and an ecosystem building cloud solutions. These cloud solutions need mobility applications and this is where I see the thousands of current Symbian developers to have a huge opportunity if they so want to see it. It is going to be a change that they have to take and any change will hurt and be difficult but without change and pain, there is no gain. There are thousands of Microsoft partners that are more than willing to partner with mobility professionals and once the mourning is over, it is time to jump on the bandwagon of cloud and mobility and start building new innovative solutions.

I would encourage all current Symbian developers and vendors focusing on Symbian to look at what Microsoft brings to the table and the opportunities that it brings to these companies. We know that Symbian is not the nicest development environment to work with and based on developer experiences, Microsoft development tools and environment will be better and more productive. Yet again, there are many different opinions on this as well, but I am basing my opinion on the tens and hundreds of developers and people that I have talked and worked with.

I would also encourage both existing Microsoft partners and Nokia development partners to get together and IAMCP.org is an example of an organization that can facilitate partner-to-partner collaboration. IAMCP has chapters and chapter meetings every day in some part of the world and this gives a tremendous opportunity to get a view of what it is to be partnered with Microsoft. I would also encourage to ignore the ones that are resistant to the change as the change has already happened and the ones that will prevail are the ones that takes this moment as an opportunity to grow and build a new sustainable business.

I rest my case and welcome all Nokia developers to learn what it is to be part of the Microsoft ecosystem.

Will Independent Software Vendors (ISVs) without a cloud strategy have a slow but certain death?

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Independent software vendors (ISVs) and system integrators (SIs) will have a wakeup call very soon unless they spend some time contemplating how the cloud will change their strategy. What I am seeing around the world is that innovative ISVs and SIs are eating the lunch of traditional and more established vendors and I expect this trend to continue. This is not just a change from client/server era to cloud architectures; the change will have a tremendous impact on how we consume software and what end user organizations expect ISVs and SIs to deliver. My company is getting requests from very traditional end user organizations to move their solutions to the cloud and this is happening in an ever increasing pace. The most logical move is to move email and document collaboration to the cloud to be followed by accounting if you are in the SMB space.

My professional career started when the mini computers were the hot platform for software development. Mainframes were still very much the main platform for large organizations, but mini computers with HP 3000, Digital VAX/VMS and UNIX grew in market share. It did not take long until client/server architectures grew in popularity and this is the era where I led product development of more than 20 software products in the business intelligence/data warehousing and forecasting/planning domain. 

Jumping forward to the cloud era (ignoring some trends such as PC etc.), I have heard many people referring that it is the same thing as mainframe era. In some respect it is, but there are considerable differences as well. These differences have to do with how we innovate and how we build software to be consumed by the outside world. The mainframe era was more contained to services inside the corporation and any outside connection was controlled via physical machines or in some cases pre-determined integration mechanisms. Cloud era will not change this, but it will change the way organizations interact from within the organization to the outside world and how they consume services provided by software vendors.

The cloud era is completely different to any prior era when you view it from software development perspective. The software world (Internet at large) includes a massive amount of services providers that expose services that can be consumed by third-party software development organizations. A good example of this is Microsoft Azure platform and the new services Dallas (codename as of now) that allows developers and information workers to easily discover, purchase, and manage premium data subscriptions. In this case it will be more about data, but it could be anything, anything at all that software vendors are melding into their solution and building a composite application. Gone are the times were small ISVs were focusing on building infrastructure elements/components. I can still remember the times when software vendors were developing infrastructure to enable applications development. I have also been forced to spend money on building proprietary communication protocols based on SNA and TCP/IP as it gave our solutions a competitive edge. This is history and will never come back again.

Is consumer buying behavior also changing how corporations will buy software in the future?

I am tempted to claim that consumers are driving buying behavior in corporate world as well. Executives are now exposed to software solutions on the net and are forcing corporate IT to view the cloud world with applications that are consumed based on use. Executives download apps to their smart phones and get exposed by younger generation how apps are used from the net. The question that many executives might have is why some of the internal applications that are used in the corporation are so clumsy to use and any change to the system takes weeks/months to accomplish. You have probably read in business papers and magazines that sales of traditional enterprise solutions are not growing anymore the way they used to. It could be market saturation, but I also believe that there is a fundamental change in adding solutions that take care of the issue and not try to solve all of the problems in the world. This could be very smart for many smaller vendors that sell high quality packages to enterprises with a price point that is very low. It is about easy buying and I know that large enterprise deals are hard to get in today’s economic environment.

There are still enterprise solutions that will not work in the cloud due to many reasons. It could be due to regulatory issues but I am convinced that with time, regulators and lawmakers will have a wakeup call where any country’s competitiveness is founded on openness and not on closing the borders.  With the buying behavior changing, some less complex areas are already making huge progress like an interesting software vendor in the security play called Spectorsoft. The company sells and develops Internet monitoring software for home uses, business, education, and government. Most of the sales happen over the Internet and the software is assumed to be easy to install and to use. This will be the most typical scenario when it comes to software purchase.

Software buying can happen in 30 thousand feet

When you review your own shopping behavior, you will also understand how most solutions will be bought in the future. A few days ago on my flight from Seattle to Dallas on American Airlines, a gentleman sitting beside me was doing extensive search on products and made finally multiple different transactions by using his credit card. This has been made possible with innovation in wireless space where American Airlines provides wireless access for its passengers. It is fascinating to think about the new software era and compare it to the era when I started by software career. We can now sign up for CRM solutions without having to talk or consult the software vendor. We can deploy accounting packages in our company such as Intuit Quickbooks Online and we can manage our daily personal financial lives by using cloud solutions such as Mint.com. We can be sitting in 30.000 feet conducting business without really thinking about it. Another gentlemen that was on the same flight was chatting on Microsoft Office Communicator the entire flight with multiple people whereby he did not miss any working hours as we were flying towards east. He seemed to spend most of our 4 hour flight using the messenger.

My company is run in the cloud and any solution that is not SaaS-based, will not be considered

I run my business in the cloud. We have not owned or managed a single server since I started TELLUS more than five years ago. All of our operations are managed from the cloud such as accounting, email, collaboration, project management etc. I do not consider any new solutions that are not SaaS-enabled and this is the situation with many other organizations as well. The market is moving into “targeted” point solutions where we buy and consume services from the cloud. Integration of these solutions to possible onsite applications needs to happen either in the cloud or in some on-premise integration software tool. Integration still remains a factor that prohibits large organizations to move its operations to the cloud, but there are already numerous different solutions that enable integration between on- premise and off-premise (cloud) solutions. With time and new cloud solutions in the enterprise space, integration issues will become easier and new standards and interfaces for integration will emerge.

Maybe not this year or the next, but I am convinced that solutions will be based on “good enough” concept where organization buy solutions they consume on the need, and not on the “elephant” model we have been used to. A typical ERP project with customizations will probably be forgotten in the future and workflows and processes will be built in a new way that does not take down the company from both cost and labor perspective.

Large organizations with ongoing cost cutting can stifle innovation

What makes the new cloud ecosystem interesting is the innovation that can happen around it. Any software company, anywhere in the world and of any size, can bring new innovation and become something in the new cloud era. Some large organizations have been focusing on cost cutting avoiding risks instead of taking bold moves to create new market entries or new products. One of these fatalities has been Nokia as it has been reported by the press like New York Times recently.

According to the press, Nokia has had many of the ideas and prototypes built that Apple is now riding with, but management has not had the courage to make them to become true. Then on the other side of the spectrum is Apple that is known for bold moves such as iPhone that Nokia positioned to consumer with marginal importance. It reminds me of Nokia’s miss on the Motorola flip-phone market with the results of huge downfall in the US markets.  With new leadership by Stephen Elop Nokia is trying to change its course. The change has already started by two senior executives leaving the company. The first announcement was when Nokia smartphone head Anssi Vanjoki decided to leave. The second noticeable departure was last week  by Mr. Ari Jaaksi, the leader of MeeGo platform. I am sure we will hear more news in the upcoming weeks of additional changes. The incumbent Apple has also been able to put many established smart phone vendors in disarray and the rise of Android phone software platform will give additional grief to all vendors, including Apple.

Software is everywhere and software will be embedded in our daily lives.

I expect the software market to bring new innovative solutions that combine the cloud with smart devices that communicate to the cloud. This will create new opportunities for ISVs around the world and the winners will be the ones that are innovative and create new solution areas and products. Software is part of our lives already today and will continue to be even more so in the future. Embedded software will continue to rise in importance which will also create new opportunities for rising ISVs around the world.

One of the leading software development tool vendors MetaCase has been able to penetrate the embedded software space with its innovative domain-specific modeling tool that enables more effective variation of software products from a platform. This type of software product line engineering will also be of great importance to enable rapid variation of embedded software solutions and still maintaining the quality of the end product.

A couple of weeks ago I had TXU Energy install two new thermostat controllers to my house that enables me to control heating and cooling in our two story house. We have two cooling units and each of them can now be controlled from the Internet and enables us to save hundreds, if not thousands of dollars each year. The temperature in Texas is brutal in the summer so any optimization of cooling has a big impact on our electricity bill. I can create multiple profiles based on our family patterns (when we are in and out) and the system feeds information to the cloud and the cloud provides me information how to optimize my electricity consumption. This is a terrific example of intelligent use of web services, where I have much better handle of my daily/weekly/monthly electricity use.

Another example of smart devices is Fitbit device that enables me to track and control my calories burnt, steps, distance and sleep quality automatically. Whenever I am close to my laptop with the Fitbit device, it automatically loads data of my daily movement to the cloud. I can compare other people in the same age and get additional information of my health based on real data, and not on some assumed numbers that I have estimated. This is made possible by intelligent and embedded software that is becoming even more relevant in the future.

Cars are full of software devices and embedded software. My son and wife has a Ford car and both of them have Microsoft Sync that enables automated synchronization of music playlists, phone books and hands free phone use when driving. The system also provides information about vehicle health, business search, traffic alerts, 911 assist and many other things. All this is managed by GPS, wireless and Internet technology. 

Software ecosystems with cloud will change ISVs whether they want it or not.

Some software domains have been slow to move to the cloud space, but this is also changing and I will be writing another blog entry of this topic very soon. One of these domains is business intelligence/data warehousing space. There as some challenges in the BI/DW arena concerning the cloud, but many of these perceived obstacles will hopefully go away sooner or later with new innovation and solutions.

Some ISVs in smaller countries/regions have been protected from competition, but the cloud will also change this slowly but surely. There will always be new software vendors (ISVs) that are soliciting business across borders and many organizations are willing to test out new solutions even if they do not know anybody from the software company. Yet again, watch your own behavior when consuming web services/solutions. Do you really care where the solution is from? The only thing you might want to make sure is that the SaaS/Cloud vendor has an option to take backups of the data to a local environment in case the vendor disappears from the marketplace.

ISVs can’t avoid developing for the cloud anymore. I am surprised how some enterprise vendors and SMB ISVs defend their turf by concluding that cloud is not an option in their software world. Not only are these conclusions wrong, they might be lethal for the company when considering the future.  According to research, cloud adoption is accelerating specifically in the US market and if old trends are intact, rest of the world will see similar kind of growth as well.

Another clear trend that I have noticed is that organizations do not care anymore to have hugely complex applications/solutions and prefer to buy user friendly solutions that can be quickly deployed. I am convinced that the famous multi-year ERP deployment era is gone and organizations require solutions that can be easily purchased and quickly deployed. What ISV organization have to recognize is that the perception of solutions is changing whether we want or not and the price points and the usability and deployment is change forever. It will still take a few years for most organizations to move towards consumption-based software world, but it will happen as we have seen in so many cases.

If you are an ISV, you do not want to miss this window of opportunity to be innovating something new and get your footprint in the market. Does your company have a strategy for the cloud yet? If you don’t, you should take action now before your competition will eat into your market share.