Category: Opinion

Opinions

The IT department will disappear within five years

 

Computer Weekly writes that the IT department ‘will disappear within five years’.

The traditional IT department will disappear within five years as core computing services are increasingly delivered via the internet, according to software as a service (SaaS) firm Nasstar.

Nasstar CEO Charles Black says that by 2013 web-based applications in the workplace make IT departments redundant.

He said money and time are wasted because IT systems are being managed on-site, but soon the vast majority of office workers will log on to the internet to access everything they need.

“IT has become a utility. And in the same way that companies do not have a chief electricity officer to help people plug in and power their devices, so the costly overhead of IT management will be replaced by a simple plug-and-play approach over the internet.”

He said this approach will remove the need to spend money on computing services simplify installation and software asset management.

“The IT industry is in the middle of an industrial transformation, which is ending the need for IT staff who install and support traditional on-premise desktop computers.”

But he said that IT support workers will always have a place.

“As with any industry where technology transforms the way things work, there is going to have to be re-deployment of skills. IT staff should have their skills focused on delivering competitive advantage for their businesses rather than being retained to deliver standard computing services that are a utility and can be delivered over the internet. Companies should be quick to change the focus of their IT department to be business development departments that ensure business success.”

Even though the industry is moving in this direction, I think five years is still early. But what do you think?

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How to save money running a Web 2.0 startup

 

 

Hat tip to blog maverick

A few wise words for Web 2.0 entrepreneurs.  I’ve added some additional points from Calacanis.

1. Don’t start a company unless its an obsession and something you love.
2. If you have an exit strategy, it’s not an obsession.
3. Hire people who you think will love working there.
4. Sales Cures All. Know how your company will make money and how you will actually make sales.
5. Know your core competencies and focus on being great at them. Pay up for people in your core competencies. Get the best. Outside the core competencies, hire people that fit your culture but are cheap
6. An expresso machine ? Are you kidding me ? Shoot yourself before you spend money on an expresso machine. Coffee is for losers. Sodas are free. Lunch is a chance to get out of the office and talk. There are 24 hours in a day, and if people like their jobs, they will find ways to use as much of it as possible to do their jobs.
7. No offices. Open offices keeps everyone in tune with what is going on and keeps the energy up. If an employee is about privacy, show them how to use the lock on the toilet. There is nothing private in a start up. This is also a good way to keep from hiring execs who can not operate successfully in a startup. My biggest fear was always hiring someone who wanted to build an empire. If the person demands to fly first class or to bring over their secretary, run away. If an exec wont go on salescalls, run away. They are empire builders and will pollute your company.
8. As far as technology, go with what you know. That is always the cheapest way. If you know Apple, use it. If you know Vista… ask yourself why, then use it. Its a startup, there are just a few employees. Let people use what they know.
9. Keep the organisation flat. If you have managers reporting to managers in a startup, you will fail. Once you get beyond startup, if you have managers reporting to managers, you will create politics.
10. NEVER EVER EVER buy swag. A sure sign of failure for a startup is when someone sends me logo polo shirts. If your people are at shows and in public, its ok to buy for your own folks, but if you really think someone is going to wear your Yobaby.com polo you sent them in public, you are mistaken and have no idea how to spend your money
11. NEVER EVER EVER hire a PR firm. A PR firm will call or email people in the publications, shows and websites you already watch, listen to and read. Those people publish their emails. Whenever you consume any information related to your field, get the email of the person publishing it and send them an email introducing yourself and the company. Their job is to find new stuff. They will welcome hearing from the founder instead of some PR flack. Once you establish communications with that person, make yourself available to answer their questions about the industry and be a source for them. If you are smart, they will use you.
12. Make the job fun for employees. Keep a pulse on the stress levels and accomplishments of your people and reward them. My first company, MicroSolutions, when we had a record sales month, or someone did something special, I would walk around handing out 100 dollar bills to salespeople. At Broadcast.com and MicroSolutions, we had a company shot. Kamikaze. We would take people to a bar every now and then and buy one or 10 for everyone. At MicroSolutions, more often than not we had vendors cover the tab. Vendors always love a good party :0

In addition, some good and some controversial tips from  Jason Calacanis

  1. Buy Macintosh computers, save money on an IT department
  2. Buy second monitors for everyone, they will save at least 30 minutes a day, which is 100 hours a year… which is at least $2,000 a year…. which is $6,000 over three years. A second monitor cost $300-500 depending on which one you get. That means you’re getting 10-20x return on your investment… and you’ve got a happy team member.
  3. Buy everyone lunch four days a week and establish a no-meetings policy. Going out for food or ordering in takes at least 20-60 minutes more than walking up to the buffet and eating. If you do meetings over lunch you also save that time. So, 30 minutes a day across say four days a week is two hours a week… which is 100 hours a year. You get the idea.
  4. Buy cheap tables and expensive chairs. Tables are a complete rip off. We buy stainless steel restaurant tables that are $100 and $600 Aeron chairs. Total cost per workstation? $700. Compare that to buying a $500-$1,500 cube/designer workstation. The chair is the only thing that matters… invest in it.
  5. Don’t buy a phone system. No one will use it. No one at Mahalo has a desk phone except the admin folks. Everyone else is on IRC, chat, and their cell phone. Everyone has a cell phone, folks would rather get calls on it, and 99% of communication is NOT on the phone. Savings? At least $500 a year per person… 50 people over three years? $75-100k
  6. Rent out your extra space. Many folks have extra space in their office. If you rent 5-10 desks for $500 each you can cut your burn $2,500 to $5,000 a month, or $30-60,000 a year. That’s big money.
  7. Outsource accounting and HR—such a no brainer.
  8. Don’t buy everyone Microsoft Office–it’s too much money. Put Office on three or four common computers and use Google Docs.
  9. Use Google hosted email. $50 or free per user…. how can you beat that?!?! Why screw with an exchange server!?!?
  10. Buy your hardest working folks computers for home. If you have folks who are willing to work an extra hour a day a week you should get them a computer for home. Once you get to three hours of work a week from home you’re at 150 hours a year and that’s a no brainer. Invest in equipment *if* the person is a workaholic.
  11. Fire people who are not workaholics. don’t love their work… come on folks, this is startup life, it’s not a game. don’t work at a startup if you’re not into it–go work at the post office or stabucks if you’re not into it you want balance in your life. For realz.
  12. Get an expensive, automatic espresso machine at the office. Going to starbucks twice a day cost $4 each time, but more importantly it costs 20 minutes. Buy a $3-5,000 Jura industrial, get the good beans, and supply the coffee room with soy, low fat, etc. 50 people making one trip a day is 20 hours of wasted time for the company, and $150 in coffee costs for the employees. Makes no sense.
  13. Stock the fridge with sodas—same drill as above.
  14. Allow folks to work off hours. Commuting sucks and is a waste of time for everyone. Let folks start at 6am or 11am and you’ll cut their commute in half (at least in LA).
  15. Go to each of your vendors every 6-9 months and ask for 10-30% off. If half of them say yes you’ll save 5-15% on fixed costs. People will give you a discount if they think they are going to lose the business.
  16. Don’t waste money on recruiters. Get inside of linkedin and Facebook and start looking for people–it works better anyway.
  17. Really think about if you need that $15,000 a month PR firm. Perhaps you can get a PR consultant to work on 2-3 projects a year for $10-15k each and save 75%. More PR firms are wasted half the year while you build up your product anyway.
    {I’m going to add a couple more of mine as I remember them }
  18. Outsource to middle America: There are tons of brilliant people living between San Francisco, Los Angeles, and New York who don’t live in a $4,000 one bedroom apartment and pay $8 to dry clean a shirt–hire them!
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Do small firms really need a website?

Thanks to all for sending me a link today’s BBC News article, discussing whether small firms really do need a website?

The evolution of the Web is changing the way consumers are interacting with web sites and businesses. Online tools such as blogs, podcasts and wikis are allowing consumers to ‘actively’ contribute and participate whilst online. In essence, the web today has become more ‘social’.

As the BBC article states, just over half of the UK’s small businesses have a web presence. Indeed, this a very small number the vast majority of those with websites offer nothing more than an ‘online brochure’.
A few pages of business description, a list of goods or services for purchase and some contact details. As a consumer with endless choices to purchase good and services, why should I buy from you?

Unless a small business can offer something ‘different’, there is absolutely no reason for them to spend any time on your site. Businesses such as Wiggly Wigglers and English Cut are great examples of small firms who have used social tools to differentiate their businesses online. Indeed, both businesses have grown virally because of it and have established strong brands in each of their business areas.

The founders of both businesses have capitalised on the ‘social’ aspects of the web, along with an interesting way of revealing the nature of their businesses in a compelling way. Both firms create regular online content in terms of blog posts or podcasts which are read and listened to by their Internet audience. This ever growing audience has access to content which is timely, relevant and interesting. If the audience enjoys what it reads or listens to, it is more likely to make a purchase and five times as likely to tell others about it. Blogs and podcasts allow a small business to start a conversation around their own businesses. More importantly, it also allows them to shape the conversation, which may have not existed before, or was badly delivered in the past.

It is important to note, that creating compelling content requires considerable commitment and time. Wiggly Wigglers and English Cut were not overnight successes. It took a few years, before they were able to reach the hearts and minds of their respective audiences. They succeeded because they had something interesting to say and the social tools allowed them to tell their business stories easily,quickly and allowed their audience to also take part in shaping their business story.

If you already have a very close and tight relationship with your customers, these social tools may not be useful to you. However,  for the vast majority of small firms hoping to grow their businesses and access new markets, such tools are becoming a necessity in order to differentiate and eventually compete in the global market place.  Thus, to conclude I think it is very important for small firms to have a website today if they want to grow their business and reach new markets.  Using social tools can help. However, the small firm will need to think of interesting ways to reveal the nature of the business they are in, offer unique glimpses and insights into their industry. Customers demand some kind of value. Creating good and useful content can help to create that value.

Read excerpts of interview with Heather Gorringe, founder of Wiggly Wigglers below, as well as an excerpt of an interview with Tom Mahon, founder of English Cut.

Interview with Heather Gorringe (Heather Gorringe)

Interview with Tom Mahon (English Cut)

Brits are the web addicts of Europe!

A wonderful cartoon from Hugh!

For businesses looking to differentiate themselves with the use of Web 2.0 tools. The story below from silicon.com
makes interesting reading.

“The UK’s web fans are spending nearly a day and a half online every month – more than internet users in the rest of Europe or the US.

According to an internet activity study by comScore, the UK has the most active online population in Europe, with the highest average number of daily users (21.8 million), the greatest number of days of internet usage per month (21 per user) and the highest average time spent online per month per user (34.4 hours).

The average European accessed the internet – from home and work – an average of 16 and a half days in the month, and spent a total of 24 hours viewing 2,662 web pages.

But across Europe there are some wide differences. Germany has the largest online population, 32.6 million people age 15 and older, while the Netherlands and Scandinavian countries have the highest percentage of their populations using the internet. The average Swedish user views 4,019 pages per month – 51 per cent above the European average.

The study also revealed Google is the most popular website in 13 of the 16 countries covered by the study, followed by Microsoft in most countries, with Yahoo! coming third.”

With such an active potential market online. Can UK small businesses afford not to promote themselves with blogging? Today, differentiation is the key. The blog, or the “Voice of the Blog”, can help your business communicate with the wider market. Today’s markets are conversation, and your customers want to be involved. To communicate, to debate, to argue, to agree, to disagree this is all good stuff.

If you are not blogging about your business, offering value or insights, your competitors will be.
Can you afford to miss out?

The rise and fall of Social Networking

Hat tip to Stuart Brown.

I joined Facebook on the weekend. I resisted as long as I could.

I couldn’t help but notice a recent surge of other people I know signing up recently as well – nor could I shake off the odd sense of déjà vu. It seems like such a short time ago that MySpace was the place to be in terms of social networking – now it seems that’s all over and Facebook is now the ’site du jour’.

It’s not the first time something like this has happened, either – there have been countless communities online that have grown, peaked, and slowly faded into obscurity. Like a roving band of wildebeest, it seems communities arrive en masse, graze for a while, and move on to pastures anew.

The current crop of Web 2.0 sites seem to have amplified this trend – there are more and more sites cropping up with a community angle, so now people hungry for social interaction on the web have a near boundless choice for their communal appetites.

As surely as Facebook has risen to challenge MySpace, and as Digg has all but displaced Slashdot, in the not-too distant future there will be other sites which rise to threaten the current generation. Perhaps the MySpace killer is already out there, just waiting for a chance to break the mainstream?

modelling-social-network-comm.png

The early days of a community site are its most fragile -most start-ups will fail without ever making it past this phase. Those familiar with running forums or sites with a community aspect will know how hard it is to get a sustained level of activity without a solid user base – avoiding the tumbleweed can be difficult.

With work and persistence some sites will begin to make headway – a small, closely-knit community can develop. Many community sites will persist at this level, with no real reason to change – others may get lucky and find a break – whether it’s a link from a major blog (TechCrunch or similar), getting on the front page of Digg (or Reddit, Netscape, etc), or even a news report or feature in the mainstream media.

Such buzz can cause a massive spike in traffic – propelling the previously unheard-of site into the view of thousands more people, and potentially kick-starting a chain reaction large enough to push into the mainstream. Of course, there are no guarantees – a spike in interest from a single link can come and go very quickly, with little net benefit.

The social networking site Virb has had its fair share of buzz – it’s been on Digg, been featured on a few high-profile blogs, but has a fairly modest Alexa ranking of around 5,000 (at the time of writing). It’s firmly in the ‘crunch’ phase of start-up sites – the ‘Valley of Uncertainty‘.

For Virb, there are two possible paths – the first is unfettered and gradually accelerating growth, the other is to remain in the doldrums indefinitely. With such a great deal of competition in the social networking sphere, it could go either way.

Facebook is the perfect example for a site currently in the midst of meteoric growth – from an Alexa ranking of around 50,000 in 2005 to around 100 in 2006, to 18 today in 2007. Little wonder that people are eager to acquire the site – even at a stupidly high price.

Such rapid growth is unsustainable, of course – and ultimately such popularity will reach a peak. There are but a finite number of people to populate any given social network, and humans are notably fickle creatures. Ultimately the usage levels for any given site will stabilise – social networking site Bebo and social news site Reddit are both in neutral-growth periods – not to say that future growth is impossible, but without intervention the user base is unlikely to spontaneously increase.

For the top few sites that attain popular appeal, a healthy period of traffic and utilisation follows the peak in usage – established services such as Flickr, MySpace and Digg have such sustained appeal that they persist at a relatively stable level – the ‘Plateau of Ubiquity‘, if you please. How long a site persists here depends on several factors, principally including the fierceness of competition and the rate at which a site can evolve to keep its users happy.

The internet is a fast changing place, and to hold a position of dominance with so many fresh upstarts is not easy. While a community site can revitalise, innovate and hence prompt additional growth, life at the top is tough. For many once-reigning sites a slow yet inexorable decline is inevitable. The once mighty Slashdot is still very popular – it’s in the Alexa Top 500 – but slipping further and further away from the pole position it once held, with younger upstart Digg usurping its audience.

Social networking and community-led sites dominate the top ranked sites on Alexa, second only to the search engine contingent. With such massive reach and the potential for direct marketing, it’s not in the least surprising that the top of such sites are seeing such lucrative buyouts – $580m for MySpace, $1.65b for YouTube, and a touted $1b for Facebook. I don’t doubt that some of these acquisitions are worth it – the potential to reach people directly on the sites where they spend most of their time is valuable indeed.

I guess I’ll see you all on Facebook. For now, at least.

41% of UK SMEs surveyed have not heard of Web 2.0

Via Social Computing Magazine

“With Web 2.0 increasingly being covered in the media,” said Andy Peart, Chief Marketing Officer at Mediasurface, “it was interesting to see that 41% of SMEs surveyed had not heard of it, implying that the message may be getting through to larger businesses but not as efficiently to the smaller business community. ”

He was speaking about a survey – carried out by Mediasurface in May at Internet World in the UK – in which 179 attendees, from businesses with a turnover of less than £5m, were asked some key questions about how they are using their websites.

“Emphasising this point, of those SMEs that had heard of Web 2.0, only 37% felt that it would have a positive impact on their business. There is still a great opportunity to show SMEs the true value of effectively managed web content and to illustrate that Web 2.0 is all about using the power of the web for business advantage,” Peart added.

Whilst 61% of smaller businesses do not believe that their website reflects their company’s brand, 52% of individuals in these companies are unaware how often their sites are updated.

These were two of the key findings of the survey that also revealed: A staggering 1 in 10 small businesses still do not have a web presence; 37% of companies update their website weekly and 11% undertake this monthly; despite the wide-ranging publicity on Web 2.0, 41% of people were still unaware of Web 2.0; and of the companies that are aware of Web 2.0, only 37% believe that it will impact their business.

It is also interesting to note, said Peart, that only just over one third (37%) of companies updated their websites more than once a week. Dynamic, current content is a key factor in delivering a positive impression to website visitors and to keep them returning so updating content regularly is a key factor.

The fact that 11% of companies who took part in the survey still do not have a website is a worrying statistic, added Peart. Since a website is a company’s ‘virtual shop window’ and often the first port of call for many potential customers, visitors are highly influenced by the look and feel, ease of use and accessibility of information. In any competitive marketplace, a company without a website can be overlooked and may not even be taken seriously; however the results of the survey reveal that 1 in 10 smaller businesses are still not taking advantage of this critical business and marketing tool.

Where do you think the Web is going?

Via Vecosys

This week in Holland is The Next Web Conference. If you can make it to Holland, its well worth a visit.

Web 2.0 startups are making the world smaller every day. However, this new era of “trusted computing” is starting to worry me. Freedom of thought, expression and opinion is a good thing. Customers feel they are empowered to contribute, spread the word and evangelize about your brand.

But as Matt Mullenweg (WordPress), points out the in the video below. The NextGen Web is highly likely to be plagued through SPAM and other security problems as we move from the desktop to the web as our main platform. I have concerns that many people will embrace Web 2.0 technologies as embraced free love and drugs in 1970’s.

As you experiment with different technologies, picking and choosing what works best for you. Don’t forget security! If I can gain access to your goods, they are not your goods anymore!

Protect, yourself, your customers and your brand online!

The fundamentals of SaaS

Over recent weeks, I’ve had a number of informal discussions with people who have seen “SaaS” mentioned but have no idea what it means or the philosophy behind it. Therefore, this post is designed to help provide an explanation. Excerpts from(Wikipedia)

Software as a Service (SaaS) is generally associated with business software and is typically thought of as a low-cost way for businesses to obtain the same benefits of commercially licensed, internally operated software without the complexity and high initial costs.

Consumer-oriented web-native software is generally known as Web 2.0 and not as SaaS.

Many small businesses have little interest in software deployment, but do have substantial computing needs. Application areas such as Customer Relations Management (CRM), Video Conferencing, Human Resources, Accounting and Email are just a few of the initial markets showing SaaS success.

Key Point – The distinction between SaaS and earlier applications delivered over the Internet is that SaaS solutions were developed specifically to leverage web technologies such as the browser, thereby making them web-native.

Key characteristics of SaaS software are:

– Network-based access to, and management of, commercially available (i.e., not custom) software

– Activities that are managed from central locations rather than at each customer’s site, enabling customers to access
applications remotely via the Web

– SaaS applications are generally priced on a per-user basis, sometimes with a relatively small minimum number of users, and often with additional fees for extra bandwidth and storage. SaaS revenue streams to the vendor are therefore lower initially than traditional software license fees, but are also recurring, and therefore viewed as more predictable, much like maintenance fees for licensed software.

Drivers for SaaS adoption

– Everyone has a computer: Most information workers have access to a computer and are familiar with conventions from mouse usage to web interfaces. As a result, the learning curve for new, external applications is lower and less hand-holding by internal IT is needed.

– Computing itself is a commodity: In the past, corporate mainframes were jealously guarded as strategic advantages. More recently, the applications were viewed as strategic. Today, people know it’s the business processes and the data itself — customer records, workflows, and pricing information—that matters. Computing and application licenses are cost centers, and as such, they’re suitable for cost reduction and outsourcing. The adoption of SaaS could also drive Internet-scale to become a commodity.

– Applications are standardised: With some notable, industry-specific exceptions, most people spend most of their time using standardised applications. An expense reporting page, an applicant screening tool, a spreadsheet, or an e-mail system are all sufficiently ubiquitous and well understood that most users can switch from one system to another easily. This is evident from the number of web-based calendaring, spreadsheet, and e-mail systems that have emerged in recent years.

– Web systems are reliable enough: Despite sporadic outages and slow-downs, most people are willing to use the public Internet, the Hypertext Transfer Protocol and the TCP/IP stack to deliver business functions to end users.

– Security is sufficiently well trusted and transparent: With the broad adoption of SSL organizations have a way of reaching their applications without the complexity and burden of end-user configurations or VPNs.

– Wide Area Network’s bandwidth has grown drastically following the Moore’s Law (more than 100% increase each 24 months) and is about to reach slow local networks bandwidths. Added to network quality of service improvement this has driven people and companies to trustfully access remote locations and applications with low latencies and acceptable speeds.

Most Small Businesses will be virtual by 2020

Outsourced business services and hosted applications will be the norm for small and mid-sized businesses (SMBs) by the year 2020, according to a report by the Social Issues Research Centre.

While 2020’s always-on Generation “C” – C for Content, Connectivity, Creativity, Collaboration and/or Communication, says SIRC – will be more able to communicate with a wider cross-section of people, virtual businesses will be outsourcing the majority of business functions, the report claims.

The study (here) predicts that purchased and locally installed software will be replaced by Software as a Service (SaaS), accessed over the internet.

“If I was an IT director, I’d want my staff focused on delivering value to the business, not patching servers,” he noted. “For example, with the hosting provider now doing security, the security team’s job is as custodians, not fire-fighters.”

Personally, I’m excited by SaaS. Today’s web innovators and entrepreneurs already get this – Outsource as much as possible, use the freeness of Web 2.0 consumer apps. However, once their businesses experience significant growth, the free consumer based Web 2.0 stuff will no longer meet their needs. This is where SaaS comes in.