Facebore – The Facebook IPO Dissapointment

May 21, 2012

John Simonds Facebook, Investing, technology , , , , , Leave a comment

Well, the facts speak for themselves.  What was supposed to be the next sliced bread was a big nothing except for the insiders who already got their money.

Expectations had it being the next Google, zooming into the hundreds of dollars with overnight millionaires.  While it was the most traded IPO ever, it ended where it started and the big bang for IPO’s are usually at the beginning of a stock downturn. (see the Groupon IPO bust).

In fact it was a BLACKEYE for the NASDAQ:

By Bloomberg

Facebook Inc.’s (NASDAQ: FB) debut on the NASDAQ Stock Market turned into another setback for American equity exchanges, with the $16 billion initial public offering plagued by delays in trade confirmations, crossed quotes and signs that orders were mishandled.

The pricing of the first transaction took a half hour longer than NASDAQ planned. About 30 minutes later, the second largest U.S. equities exchange operator reported an issue confirming trades from the opening auction with the brokerages that placed them. Nasdaq later established an appeals process for investors whose instructions weren’t carried out.

Scrutiny of American equity markets intensified in March when Bats Global Markets Inc., the third-largest U.S. stock exchange owner, withdrew its IPO after failing to trade on its own platform. Nasdaq’s mishaps, on a day when the most anticipated IPO of the year eked out a gain of 0.6 percent, disappointed investors hoping to erase the memory of Bats.

“It certainly wasn’t their best day,” Larry Tabb, chief executive officer of research firm Tabb Group LLC in New York, said in a phone interview. “That said, it also wasn’t a complete disaster. NASDAQ really needs to investigate what the challenges are and fix them quickly. There was a lot riding on this IPO and apparently it didn’t go so well.”

The U.S. Securities and Exchange Commission said it will review the trading. NASDAQ spokesman Robert Madden didn’t return calls and e-mails seeking comment. Jonathan Thaw, a spokesman for Menlo Park, California-based Facebook, declined to comment

BUYERS ARE MORE EDUCATED, OR HAVE BEEN BURNED TOO MANY TIMES

I suppose you could trace this back to the internet bubble. Regular investors have been burned too many times.  Sure Google was a killing, but Facebook had a business model and P/E that didn’t impress.  There was too much hype, not enough value and seemingly not enough surety on the IPO.

The Trader sums it up:

The truth is that Facebook is a toy, a dreamworld, a figment of the imagination. Zuckerberg wanted to make the world a more connected place (and build a huge database of personal preferences), and he succeeded thanks to a huge slathering of venture capital. That’s an accomplishment, but it’s not a business. While the angel investors and college-dorm engineers will feel gratified at paper gains, it is becoming hard to ignore that there is no great profit engine under the venture. In fact, the big money coming into Facebook just seems to be money from new investors — they raised eighteen times as much in their flotation yesterday as they did in a whole year of advertising revenue. For an established business with such huge market penetration, they’re veering dangerously close to Bernie Madoff’s business model.

Worst of All:

Even the NYT notes:

The company’s bankers had to buy shares to keep the stock from falling below its offering price, raising questions about how the stock will fare next week.

YAHOO LAWSUIT

There might be other reasons that held back the success offering, not the least of which was a pending lawsuit:

Actually, Facebook hinted at a pending legal battle with Yahoo in Amendment No. 2 to its S-1 form, filed on March 7.

In that memo, Facebook admitted that it is “involved in a number of lawsuits.” That trend, it acknowledged, is likely to continue as it faces “increasing competition.”

Facebook received a letter from Yahoo on February 27 that “alleged that a number of our products infringe the claims of 13 of Yahoo’s patents.” At the time the second amendment was filed, Facebook was “still in the process of investigating the allegations contained in the letter.”

ARE THEY WAITING FOR A DEAL:
Perhaps the real deal and best price will be waiting for a low of under $20 and picking it up then.  Even if you only make a few dollars per share, it’s better than the few cents that the first day delivered.

THE WORLD MARKETS INFLUENCE

Another speculation is that it suffered from the rest of the world.  The problems with Greece and Spain are well documented.  One thing I didn’t consider was this, An oversold rally is in the works:

From a technical standpoint, our markets peaked in February, yet price drifted marginally higher. As the S&P 500 (^GSPC) rang the bell on our target of 1365 +/- 15 basis point handles, we paused. It was not a shorting opportunity, based upon the persistent bearishness that grew as price moved higher. But after weeks of basing between our levels, the market set itself up for a sprint higher into 1420, suggesting but not reaching irrational exuberance. From that intersection, we saw price decelerate in a downward spiral by 115 handles, or about 9%.

So we must ask ourselves the one question that is more important than Facebook’s (FB) $104 billion IPO: Are we still in a healthy sustained upward move, or are we in a state of bearishness that is being masked by love for Apple (AAPL) or Facebook?

THE OTHER SIDE OF THE COIN

There are some positives with this pointed out by a smarter mind than me, Social Media expert Jeremiah Owyang, read more at this link:

Despite yesterday’s IPO closed at nearly opening price, it’s important to pause and think about how this company’s market cap reached $100 billion (for context, Pepsi is at par at $106b).  We’re already seeing many become wealthy, from newly minted millionaires in brand new M3s at the local car wash in silicon valley, to the investors, VC, and ecosystem that will benefit from the revenues, we need to pause and think why.

So what is so important to pause and think about? Why do I say the Business Model is “Brilliant”?  Facebook’s business model smashed the traditional manufacturing style we see with consumer products, and instead built a  ’consumer platform’ that enabled many around them. In fact, the Facebook business model is brilliant for the following reasons:

  1. Brilliant because the users do the work.   In many companies, hiring paid or unpaid interns is a source of scale, or even off shoring work to developing regions.  In the case of Facebook, there are 900,000,000+ unpaid members that are generating meaningful content and value to each other.   In fact, official Facebook stats indicate that 526b million of them are active each day, many of which are using mobile devices and applications to connect to Facebook as they traverse the world.  While Facebook continues to grow, third parties are observing that the rate of growth may retarding, what’s important to remember  is that most of the commercial base that brands want to seek are likely within Facebook.

WHAT NEXT?

It either goes up or down in price.  The initial IPO money to be made has been made, but the long term money will be made by the savvy investors who can buy a bargain price and wait for it to go up.  The state of the Euro and the EU as well as the debt crisis worldwide may weigh on the price.  I believe that this has changed how IPO’s will be handled in the future as it didn’t skyrocket like it should have (many theories on that).

Further, Exotic car dealers and realtors in Palo Alto are now set to collect a lot of money from the overnight millionaires.

All in all, I congratulate Zuckerberg et al who created a product, jobs, the next new widget and helped the economy.  Bono made $1.5 billion for example and exceeded Paul McCartney as the wealthiest musician.

I’ll bet it still eats at the Winklevii though because as they say, if they could have created Facebook, they would have created Facebook.

POSTMORTEM

It appears that the management at Facebook is suspect also.  While owning 27% of the stock but having 57% control by Zuckerberg is telling.  Most entrepreneurs are good at developing their product, but are bad at running companies.

Further, this from the WSJ on fumbling the IPO:

Less than three days before Facebook Inc.’s FB -9.77% initial public offering, Chief Financial Officer David Ebersman decided to boost the number of shares the company would offer investors by 25%, said people familiar with the planning. His main adviser at lead underwriter Morgan Stanley MS +0.90% assured him there was plenty of demand, they said.

Facebook shares slid sharply for a second straight day as analysts for at least two of Facebook’s lead underwriters revised their financial forecasts for the company while it was holding IPO roadshow meetings. David Benoit has details on The News Hub. Photo: Reuters.

That decision by the 41-year-old Facebook executive may have doomed any real chance the social-networking company had that its stock would jump on its first day of trading—a hallmark of successful IPOs. On Tuesday, the second full day of trading, Facebook shares fell $3.03, or 8.9%, to $31, after falling 11% on Monday. Investors are blaming the downdraft on the last-moment expansion of the offering.

And this:

Interviews with more than a dozen people involved in the IPO reveal that Facebook approached its deal differently than companies typically do. Mr. Ebersman kept a close grip on every important decision on the stock offering, not deferring to his bankers the way many companies do, according to the people familiar with planning.

Facebook Overnight Millionaires and Employee Turnover

May 17, 2012

John Simonds capitalism, family, geek, history, technology , , , , , 1 Comment

chatango Pictures, Images and Photos

As we all know, Facebook will go public in a huge IPO.  This will create many mega-millionaires overnight who work there.

I wonder what the drain in human intellectual property will be when they don’t have to work like maniacs anymore.

WHY PEOPLE WORK

Most people work only because they get paid.  A common cliche is that work is a 4 letter word.  Otherwise, they wouldn’t put up with the job they have, proven by frequent job shifts over a lifetime.  They leave for a better opportunity, or a bigger paycheck.  My observation (not scientific) is that if the paycheck wasn’t a part of the deal, the job wouldn’t get done.

Then there are a few who really like to work like my Dad.  His life was his work (HVAC engineer) and he loved it.  My uncle was a pilot who also loved his job.  Both regretted their retirement.

Finally, there are a few who love what they do because it is their passion.  It has been said that if you do what you really love, it isn’t work.  These are usually the most successful people.

MILLIONAIRE HEAVEN

When Facebook goes public and there will be a group of people created who are the overnight millionaires, many will move on.  Some of them are the creative minds behind what has made the company the success it has been.  Sure you can hire more programmers and throw options at them, but they are in the category of working for a paycheck.  Many won’t have the need (some the desire) to work.  I watched many friends I had at Amazon become millionaires and quit.  They went on to do what they wanted to because they sold stock and had the money to do so.

The people that lived and breathed the Facebook that we know it have and hold the history and the reason that it is what it is today.  That knowledge can’t be replaced.

What will be the brain drain at Facebook?  I’m sure there are loyal employees who will stay.  The executives will likely stay because they already are rich and at that point it is a matter of power, not money.  Others, I’m not so sure.

WILL THEY SELL

You bet they will.  There is already a lot of insider selling:

Insiders and early Facebook investors are taking advantage of increasing investor demand and selling more of their stock in the company’s initial public offering, the company said Wednesday.

Facebook said in a regulatory filing that 84 million shares, worth up to $3.2 billion, are being added to what’s shaping up to be the decade’s hottest IPO.

Facebook’s stock is expected to begin trading on the Nasdaq Stock Market on Friday under the ticker symbol “FB”.

The entire increase comes from insiders and early investors, so the company won’t benefit from the additional sales.

The biggest increases come from investment firms DST Global and Tiger Global. Goldman Sachs is doubling the number of shares it is selling. Facebook board members Peter Thiel and James Breyer are also selling more shares.

Even the Motley Fool is predicting investors will get burned.

Facebook’s IPO: A Quick Way to Go Broke
Facebook’s IPO will create at least 1,000 millionaires, estimates The Wall Street Journal. Founder Mark Zuckerberg is cashing out $1 billion worth of shares. But most investors who buy shares will get burned…

REASONS TO SELL

Recently, it was stated that Facebook could be a passing fad.  This fact is not lost on those looking to make a killing.

If you recall Palm, Friendster, Sony Walkmans and other technologies, or beanie babies and tickle me Elmo’s, fads come and go quickly.  As Qui-Gon Jin said: There is always a bigger fish.  This means the next bigger and better Social Network or better idea is already being worked on.  Innovation drives technology and history has proven it…..ask 3com, Wang, Digital or many others.

We already know that they economy is still in a recession and cash is king.  If this IPO is anything like Groupon, it will trend high, then the price will go down and people want the most bang for their buck.  I know I’d dump it all and diversify by day 2.  I can’t comment as to whether I’d quit as I don’t know the culture, but I’ve worked for paranoid owners before and I know that it is a tough environment.  Zuckerberg has publicly stated that it’s good to be paranoid.  If that was the case, this is the time to bail.

It’s no secret that Facebook is not fully baked on their mobile strategy or execution yet either.  That is a pretty large faux pas.

Worst of all, millions are choosing to not be on Facebook or are just saying no to it.  Many of these are in the high wealth category.

Compound that with the fact that Google is killing Facebook in advertising revenue with Facebook even facing declining revenue:

A comparison of the two companies from WordStream, a search marketing management company, suggests that Facebook is a much less effective ad medium than Google. (The caveat here is that WordStream is, obviously, rather more dependent on Google than Facebook as a medium.)

So how much brain drain and personnel IP will leave?  Time will tell, but I’m sure there are a lot of folks contemplating this issue as I write.  The pressure of work, making a killing on stock or losing a fortune takes its toll on the workers.

I had a lot of friends at Cisco when they were flying high in the market.  While others played solitaire at the other technology companies, Cisco employees spent half their day watching the stock price to see how high it would go and calculate how rich they were.  The problem was that they weren’t vested.  I hope that Zuckerberg and lawyers are smart enough to make their employee options at least 3-5 years before they are fully vested to keep the best and brightest there.  Still, some might be mailing it in until year 3 while dreaming of being rich.

The average Joe won’t get rich anyway because here are the people who have made the money:

 

My final comment on the greatest brain drain comes in the form of 2 people, Paul Allan and Steve Wozniak.  They got out and went on to different lives, but I’m not sure they still held the passion they had while building their company’s.

The WinkelVii

April 28, 2012

John Simonds Social Computing, technology , , , 1 Comment

From The Social Network, because for the first time in their lives, they didn’t get what they felt they were entitled to because of who they are.

Nice Call There On The Need For A Mouse Dvorak

April 21, 2012

John Simonds apple, technology , , , 1 Comment

John has always been interesting and very gracious to me (while I was just a flack) whenever we spoke.  He should get a kick out of this..

“The Macintosh uses an experimental pointing device called a ... on Twitpic

Is Steve Mills Running IBM?

April 19, 2012

John Simonds apple, ibm, predictions, technology , , , , , , , , 6 Comments

To start out this article, IBM just reported the smallest earnings growth since late 2009.  IBM should be scouring the land for the next Lou Gerstner.  I know there are a few internal executives getting in line for the next changing of the guard, but they are a mediocre crop at best.  My experience is that they are bunch of screamers and schemers with large ego’s (except around Steve).  I don’t know how they are going to make the 2015 earnings commitment, but I will project pain for employees getting there.  They will also have to buy back a shedload of shares (which just happened after I wrote this) to make the numbers or kill employee morale as noted in the turnover rate getting there

WHO IS REALLY RUNNING THE PLACE?

While Ginni Rometty is the new President it still seems like she is a front (wo)man while the person that holds the keys to the company’s operations is Steve Mills.  He of fame for building the software business, the part of the company that keeps it profitable.   If she can just keep the company from getting in trouble circa the Akers years, she’ll stay out her welcome.  Any hiccups won’t allow her to finish at 60.  One of the hiccups is that it will be hard to do it without Mills.  She fit the diversity model (which really isn’t that great at IBM when you consider how many who abuse the system) and she is polished and was fit.  The internal grapevine mentions her name in triviality that never was even thought of in the Gerstner/SJP years with her name being thrown around in vain to get something done.

I have witnessed Mills at work personally, watching him dust off General Manager’s who thought they were important, address Wall Street, IT analysts, reporters and various other constituencies, it was clear who is holding things together.   It appears he lost out in the age game for the President position, but he was the right guy.

He runs both the most profitable division and is now trying to save the dinosaur businesses for IBM, those being Software Group and Systems Group (servers mostly, and mainframes mostly).

SERVICES

First, let’s take Services out of the equation.  Not to mention that IBM is blowing it by firing the wrong employees.

Services is low margin/high volume was essentially flat in first quarter so while it is important to IBM (if you include Global Financing and you have a much worse number), it is almost a legacy now and is not the growth engine it once was.  It provides a needed pipeline of business to service (sorry) HW and SW sales, options competitors don’t have or try to copy with varying degrees of success…. too bad that ship sailed years ago.  It is neither the mainframe model nor future for the company as the industry changes, but it does provide top line numbers crucial to financial statements.

SOFTWARE AND HARDWARE

Software was up as usual as that is the model and umbrella for the future.  It is a high margin business as long as you remember a caveat.  Let’s be clear that upwards of 80% of the IBM software is sold for the System Z or “The mainframe”.  Conversely, the mainframe business (let’s quit messing around with the Systems Group moniker here) is down a lot.  Guess who is going to catch hell and budget cuts this quarter.  Because the economy is down around the world, these numbers are down. I’ve got news for the industry, it will not turn around next quarter or next year.  Growth is 5-10 years away and who knows which company will be in the drivers seat for that timeframe.

As stated earlier, Mills is approaching 60 which as far as I can see was the deal breaker for him becoming the next president.  No one other than Palmisano understood the company as well and as long as Mills does.  He also knows where the company should be.  He’ll get to go out on his terms, but IBM should make him stay on for another 5 years to keep things going until the world economy and job market turn around.  He is the glue that keeps things together and would be a bigger loss to IBM than even Palmisano was, because that one was so orchestrated.

EARNINGS

IBM  has laid out a plan for investors which makes it a top IT company.   Much of this based in belief of the endless story of Big Data (and cloud, but who cares about software delivery, we’ve been doing that in different ways and will continue this trend by calling it something new soon).  It has much upside, but will not save a company by itself (diversifying is something IBM has done better since almost committing hari kari in the 80′s-90′s).  However, there is always a bigger fish in the IT sea.  Will  Watson be the next big thing?  Name me any huge sales of a Watson unit.  It is an ingenious marketing plan that shows IBM can do something others can’t.  In reality, only the top Data consumers can afford a real Watson and the army of IBMers to keep it running as  it is already a product with the name System P and fancy software (see an Analyst Group who defines IBM Here).

MAKING MONEY

You make money by increasing sales and/or reducing expenses.  Guess what, revenue was just discussed and sales are going to be tough for a while.  300-400K employees are tough to keep employed in this situation.  This means new rounds of layoffs, travel restrictions, expense cuts and other austerity measures are on the way before 2015.  Keeping them happy will be next to impossible without turnover. It appears that the employees are mocking the new system too with the 2015 projections internally code named Road Kill 2015.

These are tough times and even if you’ve cornered a portion of the market such as Apple right now, you are just another fish in the sea, and never the biggest.

The man who has been tested for these tough times is Mills.  Underneath, I think he’s running most of the company which for their benefit he should be doing rather than planning his retirement.

Bottom Line: There will be a big hole to plug when he leaves and life is going to be a lot harder for Rometty as the Mills replacements are OK at best.

MY FAVORITE PR STUNT OF ALL TIME – THE WORLD’S FIRST LOW TECHNOLOGY ARTIFICAL REEF

March 15, 2012

John Simonds history, humor, ibm, technology, Work , , , , , , , 2 Comments

HOW IT STARTED

This story actually began with the unplanned running aground of the Mercedes I in Palm Beach.  It desecrated the private holy grounds of the hoity toity for over a hundred days in late 1984.   About the same time IBM introduced the PC-AT, billed as the most powerful personal computer ever built.  It had one problem though as internally sat a 20 MB disk drive made by CMI.  It was based on stepper motor technology and it both failed at alarming rates and was as slow as cold honey.  It was that flaw which gave birth to the drive aftermarket in the PC industry and caused one of the biggest black eye’s to the PC’s reputation.

CORE INTERNATIONAL TO THE RESCUE

A small disk drive company in Boca Raton – the home of the IBM PC saw the obvious problem and created a marketing campaign which recalled the IBM drive.  It then sold you a 40 MB drive made by Control Data Corporation and re-badged as CORE product for $2,595, gave you a $1000 rebate and ran an ad claiming it was going to build an artificial reef out of the CMI drives (you can buy gigabytes now for less that $100).

Here is  a portion of the ad which created a sensation in the print media, as both IBM and the PC had been infallible up to this point.

PC MAGAZINE CATCHES ON

At this point Paul Sommerson, Bill Machrone, Bill Howard and other writers contacted CORE and asked for pictures of the reef being built.  Said owner confided in me that he was really going to send the drives back to CMI for a rebate  and not to lose too many, so we tried to stage the event.  We took his boat, the MEGABYTE out of Jupiter (not Boca) and made it look like we were really dumping the drives into the water.  I’m sure the Nanny state EPA would have been all over us had we really done it, but the rest of the story is that we only dumped the drives in the picture (note the false bottom).  I finally convinced him that we needed to actually throw some drives overboard and that one shot is now etched into PC history.  It was the last picture on the roll of film (if you remember film).  We tried fishing for sharks to put a drive in one of their mouths for the table of contents and had one on, but it bit through the line and we ran out of time.

The film was immediately Fed-ex’d to NY as they were on deadline for what is known as the Fire Ax issue.  The title was “Is Your PC Safe”, but there was a fire ax coming down on a PC-AT and the picture was in both the table of contents and the article.

THE AFTERMATH

As I mentioned earlier, the boom of peripherals was starting and this poured gasoline on that fire.  CMI went out of business after losing their contract with IBM and CORE shipped hundreds of drives while becoming famous.

I personally conducted many interviews discussing drive technology and the stunt (if I recall, the story became better than the actual event) and the owner had to move his boat.  He had rented a slip from an IBM’er in Boca, but due to the kerfuffle he was asked to find another docking space.

IBM had a PR nightmare on it’s hands now.  I’m told that Lou Gerstner’s personal speech writer was called in to clean up the mess.  CORE (meaning me as I handled all of PR at this point) got years of mileage from this event.  We even took a drive to trade shows for over a year and put it into a fish tank with fish.  Everyone in the industry knew about it and we even had hats made up saying things like:

My drive won’t stay up, I built the PC that IBM didn’t, My Drive is bigger than your drive and others.

We gave away thousands.  In fact I think we invented the hat give away in the mid 80′s (one time while leaving the show, we saw a drunk bum on the street with a CORE hat on).

 

It didn’t kill IBM’s business, but it seemed to help the sales of clones which took off and thus began the downfall of IBM’s dominance in this space.

EPITAPH

It is funny to me that I was hired by IBM to do PR for them 14 years later, and even did a stint in the PC division.  IBM had dropped to 6th place in PC’s by then and I recall that the PR department was led by two nincompoops when I got there.  I wonder if they had known it was me that helped cause one of the great PR nightmares for them, would I have gotten the job?

Was IBM’s Watson a Breakthrough or Very Cheap and Creative Advertising?

January 8, 2012

John Simonds ibm, ibm research, obvious, technology , , , Leave a comment

Update: Watson is in the next publicity stunt with Wall Street as sales seem to be lagging.

As we all know, Watson appeared and won on Jeopardy last year.  It was the culmination of years of work and manpower to build a machine that could react faster and be programmed to win a game show.  It was brilliant, but more for promotion than technology (as evidenced so far).  There is little doubt that the promotional value was priceless to the IT industry and an easy calculation by IBM to one up the competition.

The two humans were limited to their capacity, whereas Watson was a massive computer with incredible storage and processing capability.  It was programmed specifically for the game, so while not a slam dunk, inevitability wasn’t in much doubt.

I don’t know about you, but as I get older, I forget things and computers don’t.  You can add memory, processors and build it big enough to recall more than any amount of humans.  Jeopardy had two champions,  so it wasn’t really a fair fight.  You ultimately can overpower any certain situation with billions in technology (which is what it cost to win), but throw something like emotion or nuance into a situation and computers are lost.

It was the perfect set up.  Everyone loves to root for the underdog even though the humans really fit that role.  It was accomplished by putting the biggest two winners ever on Jeopardy up against poor Watson.  The truth was that it never was going to be close given the confines of the rules of the game.  In real life, with unforeseen issues, the humans would have a fair chance.  That was never the point of Watson though.

IBM got to promote a research facility, executives, technology and almost a free ticket for three days.  Jeopardy also was a winner with dominant ratings.

I don’t want to debate the possibilities of Watson’s future contribution to technology other than stating that it is another step (and possibly direction)  in data analytics, and it increases the perception of IBM’s lead in this area (thanks to a lot of M&A and some folks that worked without getting enough credit).  It hasn’t been the breakthrough that companies have jumped on like an iPhone, yet billions of dollars have been spent on the same hardware used to build Watson since Jeopardy for traditional IT.  Time will tell.

ADVERTISING

For now, the real victory was exposure.  How much would it cost to purchase 1.5 hours of prime time advertising for a 3 day period where you basically get to change the rules of advertising to where you don’t even have to pretend that an ad agency was involved (also saving millions).  Here is the breakdown of advertising to program, but in reality the big IBM Watson Avatar is a commercial by itself every time Alex said the word Watson.

From a Mad Men point of view (advertising show for those who don’t know) this was a stroke of creative genius that began with winning a chess match against Gary Kasparov, then moving to prime time TV when new exposure was needed.  I saw people glued to their seats and talking about it the next day at a conference.  Nevertheless, it still has all the appearances of a publicity stunt. Unfortunately, it saddled IBM with a 2015earnings projection claim that Palmisano left Gini Rometty to figure out.  With this economy, it has Sham’s chance of beating Secretariat in the Belmont Stakes to make it.

There will be claims that further technology is Watson legacy and success, but it is not what was intended by the efforts which related to making sure it beat the humans on Jeopardy.  That is supposed to come later.

CURING THE COMMON COLD

It has been suggested that Watson technolgy is being used to cure cancer.  I like others wish for this as I lost my mother to that disease.  Along with AIDS and the common cold, I have my doubts that we’ll really see this in our lifetime.  By then, trillions will be spent.  Like Global Warming, we could do more by helping to feed the starving and providing help and aid to millions.  This is not what Watson is about though last spring, it was the advertising win of 2010.

So the jury is out on whether it will succeed in medical or some other breakthrough.  For now, it was the promotional prime time win last year.

Why I Bough an iPhone Vs. Any Google Device

December 12, 2011

John Simonds capitalism, iphone, iPod, microsoft, technology , , , , , 1 Comment

It took me this long to finally buy an iPhone.  I waited until the right carrier had it (AT&T is a diversity nightmare), then my current provider didn’t have international covered because of CDMA.  So when that all came online, I then had to wait for an upgrade time so that I wouldn’t pay an arm/leg/firstborn.  It wasn’t a feature to feature comparison, 3G or 4G or any other techie issue that caused it.  It was because I know Google, have worked with Eric Schmidt  and believe they are evil about their intentions with our data, public or private.

Before any hate mail comes in that Apple does it too, I turn off location services when I leave the house and can confuse them enough that tracking me doesn’t me do them any good….not that anyone would/should care.  I’m a statistic to them and so be it.

Disclaimer:  I’ve had an iPod since 1994 (rotary wheel version) and have an iPad and iPod before I bought the phone, but I worked with/against Google and have met Eric Schmidt at a partner conference.  I don’t trust Google nor do I trust Schmidt as I heard what they are up to.  Basically the same thing as Pinky and the Brain are after, take over the world.

I and I believe they are sincere.  Apple developers are trying to build an ad base to compete against the world/Google, but I can turn them off…..Google follows me, my house, what I buy and everything else…..then are all too happy to share it with those I don’t want them knowing I exist.

In the quest for data analytics, companies have sold their soul.  Google and IBM are at the top of this data list, closely followed by Oracle, only closely in this case as they are hampered by a leader who holds them back from becoming a great (or modern) company.

OPEN SOURCE VS. PROPRIETARY.

Most analyst’s I talk to have Android so that they can practice what they preach, it’s an open world.  Well open source doesn’t work as well and smooth as IOS, so I don’t give a rat’s rump about this.  I just want it to work and for me not to have to fix or code one more device.  Most open systems require tinkering far too often.  So I’m calling BS on that argument.  I’m a consumer with too much going on to have a device that doesn’t work every time and easily.

SECURITY

It appears that Smartphones are now being attacked by malware and theft.  I know of 2 so far on IOS, but Android seems to be up 90%, so it looks like Apps on this OS are easier to break into.  This was not my initial decision point, but has skyrocketed to my list of concerns within a short period of time.

MY PREVIOUS SMARTPHONE

I had one of the newest Blackberry’s and in one word of advice for those who are considering buying it….don’t.  The interface is archaic compared to IOS and I got it because of a corporate policy that stuck me with a device that was hard to use.  I had to take it the phone store to set up the special things I wanted (I have about 7 email addresses and many special things related to what I do, and BTW I set them up myself on the iPhone) and have set up phones and computers for 31 years….before things were easy so I know how to reverse engineer without instructions

One thing I liked about Google was that 3 executives owned 8 corporate jets.  God Bless Capitalism.  I think IBM has a whole fleet of jets for the executives also so they “don’t” have to fly commercial.  Too inconvenient I guess.  It’s the same for most corporations.

Anyway I bought the iPhone.

BTW, I’ll never buy another Windows/Microsoft product again now that I work for myself.  They can only treat me this poorly (since Windows was released) for so long before I vote with my own money like I did here….

It looks like I’m not the only one.  ZDNet wrote this a few days after I wrote about my travails.

Is the PC Dead Or Is It Marketing Hype and Spin?

September 23, 2011

John Simonds apple, ibm, iphone, iPod, microsoft, technology, Uncategorized , , , , Leave a comment

Update: Apple is more nails in the PC coffin with the new announcement of Post PC devices.

  • 362 Apple stores
  • 315 million iOS devices sold through last year, including 62 million in the last quarter
  • 585,000 apps created
  • 25 billion app downloads
  • 1080p movies and TV shows for iCloud and the new Apple TV
  • 15.4 million iPads sold in the fourth quarter of 2011
  • 200,000+ iPad apps
  • 2048 by 1536 pixels displayed on the new iPad, with 264 pixels per inch
  • 44 percent greater color saturation than the old iPad
  • 5 megapixel sensor on the new iPad camera
  • A maximum of 73 mbps downlink with 4G LTE on new iPad
  • New iPad specs: 10 hours of battery life, nine hours with 4G; 9.4 millimeters thick, 1.4 pounds
  • Same pricing as last iPad: Wi-Fi models are $499 for 16 gigabytes, $599 for 32GB, $699 for 64GB; $629, $729 and $829, if you want 4G
  • Old iPad now starts at $399 and $529

The Real Meaning in Marketing Speak

In the mid 2000′s, Sam Palmisano of IBM declared the era of the PC is over.  This was somewhat of a marketing move since IBM had just sold the PC Division to Lenovo.  What he really meant was that IBM is getting out of consumer products.  IBM also sold other consumer divisions that were not the margin kings that Software and Services were.  Disclaimer, after working either for/with/against/partnering with IBM for 31 years, I can say that a lot of what they do is incredible spin on pretty good technology.  I had better knowledge of what was going on than what was told to the outside.

PC’s are Toasters Now

This is a bit of a history lesson.  There was a time that PC’s were special and had value.  They still can be found on almost every desk or backpack at an airport, but in reality they are now (and have been for a while) a consumer product.  There gets to a point in time in every product’s life cycle that economies of scale and parts availability drive this value (and therefore the price) down when you can’t differntiate.  It is compounded by newer technologies (tablet computers and mobile devices) to where you can get them at any consumer store that sells toasters, video games and TV’s.  Any improvement is just a little bit better (except Windows which usually is worse), not an era better which was the case when they were new.

PC’s have done this to themselves over the years.  Remember when all you could get was a bulky desktop?  Technology moved on to the luggable computer to the laptop. Now you can get a wafer thin Macbook Air (for a premium price), but the technology curve will drive cost down here when every manufacturer offers it.  Margins are razor thin and there is minimal hardware differentiation on the Wintel platform.

The Effect of iPad and Mobile Phones

Ultimately, the world is driving your communications and computing device to be in your hand.  The end game of input is not a keyboard, but voice.  This addresses the need for instantaneous that we have required as we’ve shifted from email to IM and texting, and from blogging to tweeting. I envision a vision screen that is projected by your small handheld that lets you see what a huge monitor is required for now in the near future.  For more on this, see Project Blade Runner as an example of what the future could look like.

PC’s are already under fire from Tablet computing and smartphones.  While at some point you still need a PC for complicated input/output such as the dreaded Powerpoint and the more mundane payroll/HR applications, they soon will be adapted to tablets as we easily morphed from immobile desktops to laptops.

Many analysts have shown that more phones and tablets are sold than PC’s.  More texts are sent than emails and we certainly have more tweets than blogs.

The Cloud

Powering a lot of this of course is the overhyped Cloud model.  While conceptually it has been around for a long time (we have called it client/server and other names), it is a software delivery model that will make the end device irrelevant.  Perhaps you could get your email on your toaster or refrigerator.  You could make phone calls by dialing in the air at some point.  The issue is that we are driving the connecting device smaller, cheaper and more powerful (and less relevant) so that we can get what we want, when we want it and wherever we want it.

Lenovo and HP

Companies are jumping out of this market as evidenced by IBM and HP willing to sell their PC businesses worth billions in revenue, mostly because of low single digit profit margin.  They realize that there isn’t much money to be made anymore, again putting them in the toaster category. Similar components by most, similar operating systems, market driving memory and storage costs and overhead to sell.  HP is now particularly vulnerable as companies negotiating long term contracts will throw HP out  as a viable vendor not knowing what their future will be either in terms of ownership or viability.  HP has completely lost their way starting with the purchase of Compaq years ago, then dumping their tablet, announcing the sale of their PC division and switching CEO’s like underwear.

The Apple Factor

Everyone eventually builds a better mousetrap.  The Mac has been around for a long time, but the entry way to the door to Apple changed with the iPad/iPhone.  A new processor, operating system visibility, technology paradigm, profit potential and the coolness factor make Apple a different model than the PC.  Prior to that, Mac’s were a niche player in the creative, advertising and education world.  This has changed partly because the OS is better, Windows is not a great platform and Mac’s are headed in the direction of iPads.

So Is the PC Dead?

Ultimately yes, but not this year or in the near future.  I’ve seen models of computers called bricks the size of your phone that you can drop in a kiosk and work anywhere.  You can even use them like an iPhone if needed, but until the voice input issue is resolved, keyboard input is an inhibitor.

No one thought we’d ever see the end of typewriters, faxing or even the 360, but technology advances at an increasing rate economically speaking.  What will be interesting is which social mores we’ll break like talking to ourselves (on a cellphone) in public (or worse in a bathroom or driving).

Is the iPad the next endgame?  Likely also not.  Companies are trying to out do themselves and we’ll wind up like the Jetson’s one day.

Dealing with Email

May 24, 2011

John Simonds general, obvious, technology, Work , , , Leave a comment

The 300 Baud Modem Days

I remember back in the 80′s when I had exclusive access to some very important reporters as only about 50 of us were on MCI Mail and it was sort of a club that we had.  We didn’t say it, but we didn’t share our secret as they got pounds of press releases by snail mail daily.  If they got an email over a 300 baud modem, they knew it meant something.  We only contacted each other when it was important, so no one abused it.

Remember, this was the days of the office memo that got typed on a typewriter and sent around. CC’s were made with carbon paper so it was to tough to abuse it due to the trouble

The Evolution, Email is the new Snail Mail, and Spam King


Later, Outlook, Lotus Notes, Pegasus and a ton of other email clients have come and gone.  Email could now even be regarded as the new snail mail, and certainly it’s the king of Spam.  Being CC’d or BCC’d on thousands of notes fills up inboxes globally.  Many have gone to multiple email addresses to divert off the spam for personal use, but if you work for a company, you’re stuck with that address that is all to easy to find.

So what are the up’s and down’s to email?  It can be the only way to reach someone (in a company, a text message or tweet DM is likely faster) if they are in a different timezone or are miles up the corporate ladder for you.  So that is good.

Slogging through endless emails that have little impact are a time suck now and you must fight the urge to respond, stopping the chain.  There are other downsides which I’ll discuss below.

Email Road Rage

Ranting behind the false curtain of email rather than face to face or calling the person directly.  I dubbed this tactic Email Road Rage.  All have been the recipient of it or have seen someone go off the deep end, many times later to regret it.  Bosses seem to think they have immunity on this, but it inhibits employee behavior and openness via email exchange.

The best executive I’ve worked directly for, Buell Duncan once told me to answer these kind of emails once, and then let it roll off your back like water off a duck. Don’t spend nights letting it keep you up.  Deal with it and be done.

While it may be tempting to get into the fray, especially when one is feisty is to defend your position, attack back or go behind the offender’s back describing in unflattering terms what kind of a person would send these emails, the best answer is…..

Don’t Respond Unless Required.

Most email stops when you stop the chain.  I get you have to answer the boss, but not joining the fray is the best medicine.  I have found this hard to do, but being a Ph.D. in the School of hard knocks, I’ve learned to not answer when at all possible.  Don’t explain or defend yourself, just use the del key, the appropriate response.  This is true for tweets.  I’ve gotten into endless tweetbacks that I wish had never happened.  Now I just ignore and I’ve forgotten the next day or someone else is naive enough to get caught into the trap.

Along with don’t answer is don’t send.  You can avoid a lot of useless email if you don’t feel the obligation to fire off emails at every whim.  I’m learning that lesson also.  My inbox thanks me.

The most important time to start going dark is….

Before Vacation

I purposely don’t start anything that could bite me while I’m trying to not work.  IBM is the poster child for people working on vacation, something I try hard not to do.  I got emails from bosses on anniversary vacations, which I’m sure made their spouses happy.  The way I see it, the doors to the company will stay open while I’m away.  Americans are notorious for not being good vacationers.  Not me.  I put on that I won’t be checking email until I return.

The key to this is to start slowing down a few days before you leave.  This slows the wheels of motion and gets the anonymity going.

Conclusion

While email can be helpful and it certainly is still our main method of communicating, it follows Sturgeon’s law.  Life has enough of that anyway, so why add to it?

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