Posted by John Patrick on Dec 29, 2009 in
IBM,
Public Policy 
In the old days, companies recorded their sales on punched cards and then sorted the cards to analyze sales by customer number, date, state, and department. It was rudimentary but amazing compared to what could be done by sorting paper invoices. Today, the more advanced companies utilize “analytics” to dig deep into the voluminous data that they capture about each sale and the relationship they have with their customers. If you buy a bag of Frito Lay chips at a local 7 Eleven store, the home office in Dallas knows about the chips purchase instantly — and that is the trivial case.
Savvy retailers, using analytics, know when an online buyer makes a purchase and if they have been a customer for more than 24 months and if they have spent more than $1,000 year-to-date and their cumulative purchase returns have been less than $100 and the returns have been 85% due to an ordering error and they tend to buy premium brands and they use Prime shipping and they live in 12345 zip code and their likely income is more than $xx,xxx and they have written more than X product reviews, and they recently made an email inquiry about a certain product feature. The analytics results in them getting on a special list of customers who get special attention. In the case of a financial services company using analytics, they look at the number of visits you make to the web site and how many times you have a complaint about something and what the bottom line profitability of your relationship with them has been over the past xx months and that customer may end up on a list of ”high maintenance” customers and not be eligible for certain offerings.
Some customers would prefer that such granularity of data not be available but most are delighted with the enhanced and personalized service that analytics makes possible.
I don’t normally write much about political or geopolitical issues. Like all of us, I do have opinions but it has been my practice to stick to technology, music, Mozart, and motorcycles in the blog. However, I can not resist saying something about the attempted aviation attack of a few days ago. Should the government use analytics? It seems so basic. If an airline passenger who is on a watch list purchases a $2,800 one-way ticket with cash, is making an international flight and has no checked baggage, requests a window seat above the main fuel tank, and has been reported by a creditable source to an embassy as a possible radical, should that passenger show up on someones radar screen as a person deserving of special attention?
From an information technology perspective this would be a trivial utilization of analytics. Proposals to utilize analytics have been made in the past. Each time, the political process has stopped the proposal. Civil liberty concerns have prevailed. If the bomber had been successful would things have changed? History would say no. Businesses are getting smarter and smarter. Our government is spending more and more money. Is it getting smarter?
Posted by John Patrick on Dec 17, 2009 in
Gadgets,
Media 
I first got ”Kindlized” in March 2008. Now, nearly two years later I have been “nooked”. The “e-book” — replacing the paper book with something electronic — is not a new idea. Project Gutenberg started in 1971 and has a collection of more than 30,000 books which have been digitized. Digital books can be read on a PC and there are various software offerings that can enable you to read books on your mobile phone or personal digital assistant. Over the years there have been various “e-book readers” introduced. The idea behind the e-book reader is to have a dedicated device that is optimized for reading. I had never met anyone, myself included, that found reading a book on a PC, a handheld device, or an e-book reader to be a good experience. For years I had believed that the day would come but that so far nothing had compared to a real book. That was before I became “Kindlized”.
After reading Ken Follet’s The Pillars of the Earth in a new and comfortable way, I was hooked. I had recently purchased the paperback version of “Pillars” for $14.97 and was about half-way through the gripping 1,000 page novel. With my new acquisition I visited the Kindle bookstore on the device and keyed in “pillars”. I selected the Follet novel and in less than a minute the Kindle version was ready to read. The $7.99 charge for the e-book was automatically placed on my credit card. There is no login, user id, password or network connection process. The “Amazon Whispernet” (from Sprint) is totally seamless. At the time there were 100,000 kindlized books — now there are more than 390,000. You can even get Net Attitude on the Kindle. As for reading books, I have reached the point where I won’t buy a paper book anymore. If it isn’t on the Kindle, I don’t want to read it. Maybe I will miss something but 390,000 books will keep me busy for a very long time.
A year later I migrated to the Kindle 2 — now known as the Kindle and also got a Kindle DX for use in aviation — it is great for airport and approach charts. Now along comes the Barnes & Noble nook. I could not resist getting the new gadget. It is similar to the Kindle but different in a number of ways. One very nice feature is that you can “loan” a book to a friend. It is an electronic sharing and the friend can only have it for two weeks and then must buy their own if they haven’t finished with it. Barnes & Noble has also nicely integrated their e-book with their stores. Free WiFi and some free reading of the day. I don’t spend much time in stores but many people do. I think it is a good feature. As for the device itself, it is very nice but quite a bit heavier than the Kindle and not nearly as intuitive — at least so far. Getting it out of the packaging and getting familiar took much longer than the Kindle. The nook has a color screen at the bottom of the main display which shows the cover of the book and provides navigation. I need to give it more time but initial impression is that the Kindle is quite a bit better. It is a joy to use. Once I finish the juicy Ken Follett novel I am reading on the Kindle I will begin another novel on the nook and see how it goes. Stay tuned.
The Chinese invention of paper in 105 A.D. changed the way the world communicates. The invention of “e-ink” may change it again. The electronic-paper display provides a sharp, high-resolution screen that looks and reads like real paper. The screen displays the ink particles electronically. It reflects light like ordinary paper and uses no backlighting. While the technology is racing forward, the publishers are stuck in the past. Several of them have announced that they will make new best sellers available on e-books only after at least several months. They think that if a hot new book comes out you will go to a store or online and buy the physical book. They don’t understand or are in self denial about how passionate e-book readers are. They say if books “deteriorate” to being sold for $9.99 (or less) as e-books that the result will be that consumers will end up with fewer new books to choose from. One would think that after seeing what (predictably) happened to music that they would embrace e-books in a major way rather than wait wait wait. I do not see books disappearing but they will become more collector items and niche items for those who want them Books will also become more expensive.
e-books are here to stay and they will get better and better. One e-book holds thousands of books and yet my grandchildren carry tens of pounds of books in their backpacks and have to bend over to carry the weight. When they tell their children about this it will seem very strange.
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Commercial Air travel is not a barrel of fun these days but leaving home at 4:30 in the morning enabled me to get an early flight and a smooth trip to San Francisco. The return trip two days later was a different story. Airlines can’t control the weather and occasional maintenance issues are to be expected, but the frustrating part is the lack of good communications on the ground at the airports and the lack of integrated systems resulting in getting different information — kiosk, overhead displays, ticket counter, at the gate, airline lounges — for the same flight. The maintenance issue was fixed quickly but the “paperwork” to get approval for takeoff required a couple of hours. Most of us have similar stories — there are a number of my airline stories here in the blog.
This was the eighth year for the Supernova conference — run by Kevin Werbach who is a leading expert on the business, policy, and social implications of emerging Internet and communications technologies. Kevin has a good track record of anticipating key trends along the path to the Network Age. Supernova attracts CEOs, bloggers, entrepreneurs, academics, practitioners, visionaries, policy experts and industry thought leaders. Like all conferences, the best part is catching up with friends and colleagues and comparing points of view.
There are a couple of unique things about Supernova. It is the only conference that connects with one of the world’s foremost business schools — the Wharton School of the University of Pennsylvania. The other unique feature is how “connected” the attendees can become with the speakers and each other. Supernova offers a live video stream, a twitter feed, and live blogging to enable attendees and remote participants from all over the world — there were 200+ people from numerous countries in San Francisco this year — to all jump into the conversation.
It is very difficult to summarize what I learned at Supernova. Every year it is mind expanding. I feel fortunate to be there and participate in the dialogue and stay somewhat on the edge of what is evolving. The mobile Internet continues to gain momentum — seemed that everyone there had an iPhone. Last year I reported that social computing was mushrooming. Not sure what word describes the current status — maybe all-consuming. There are serious discussions going on in the development community about how (not whether) to standardize identity, authorization, and applications across the various social networks in some sensible way. Privacy has always been an issue but as storage cost approaches zero, everything we say or do will be saved. Twitter is the tip of the iceberg. The telecommunications operators continue to consolidate and continue to offer poor customer service and a lack of choice.
Kevin kicked things off at the Mission Bay Conference Center (UCSF Campus) with his view of the “changing world”. The afternoon panels focused on how pervasive connectivity is altering everything from our social interactions to our cities and how the infrastructure of the Internet is quietly being transformed. The rise of cloud computing and broadband applications are shifting the landscape for both network operators and service providers. Anil Dash talked about how networking is beginning to make government more efficient and collaborative. Peter Gruber talked about the turmoil in the motion picture industry where it is becoming harder to predict what consumers will want. Avatar – to be released in a couple of weeks — cost $350 million to produce while Paranormal Activity is said to have cost $11,000. Which one will make more money? Chris Anderson, of Wired, talked about how a clever designer can use three-D software at home to design a physical object and then “manufacture” it on a $750 three-D printer in the basement.
Day two was at the Wharton San Francisco Campus. During the Opening Plenary Session, JP Rangaswami, John Hagel, Umair Haque, and Ellen Levy talked about the financial crisis and whether it is a permanent discontinuity in market economics or just a temporary bump in the road? The consensus was that the current recovery is temporary and there are big problems ahead. John Hagel cited that big business has had a steady decline in return on assets for decades and there is no sign that it will reverse. Not a pretty picture. I am more optimistic than any of the panelists.
Another interesting panel was about whether “There is a Media Business?”. Their consensus was that the world doesn’t need newspapers, record labels, and TV broadcasters as we know them but it does need journalism and distribution mechanisms for quality entertainment and information. The focus of the discussion was whether innovative new forms of online media will replace what is lost as traditional industries collapse? Most of us would say yes.
My friend and moderator Tim O’Reilly moderated a discussion about “Going with the Flow”. We are moving from a world of web pages to a rich and continuous stream of information. Emails replaced by tweets. A web page about train schedules replaced by real-time data on where the trains are at the moment. Reading a review of something replaced by tweets of where someone is having a meal and what music they are listening too. For some, all of this is too much, even for some techies. One thing I can say for sure. The trend to more and more information about everything and everybody is not going to reverse any time soon. Hopefully kids will learn that posting things about their social activities today may prevent them getting a job or getting elected in the future. There is a lot of room for some common sense.
The panel about telecommunications was really good. Paul DeSa from the FCC gave a glimmer of hope. The FCC really wants to maintain an open Internet, deploy broadband throughout the country, and keep competition going to increase innovation. As I have written here many times, I am convinced that Verizon, Comcast, and AT&T do not share any vision that might reduce their monopoly power and profitability. I am all for profitability but only in a competitive marketplace. The lack of adequate competition is why prices are high, contracts lock us in, Internet speeds are exaggerated, and customer service is poor. I am not in favor of expanded government but in the area of telecommunications the government is our only hope in the short run. Looking forward to Supernova in 2010.
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