Archive for November, 2011

Data-Driven Customer Satisfaction

November 29, 2011 in Advertising,Analytics,Search | Comments (1)

Most people think of Google as a search company that offers other nifty tools and services, such as Google Apps and Google Translate, for free. But those of us in the IT industry know it’s really an advertising company that just happens to do search and other stuff. That latter view becomes abundantly clear when you read Steven Levy’s absorbing new book, In The Plex: How Google Thinks, Works, and Shapes Our Lives.

Like many success stories, the company did not initially understand its true mission in advertising. As detailed in chapter two, “Googlenomics,” it more or less backed into the ad business, thinking it might, at best, make up 10-15% of the company’s revenues. It now generates close to $3 billion per month in advertising-related business, approximately 97% of the company’s revenue.

But that unprecedented success, however unintended, has been driven because Google’s leadership believed in two things above all else: data and customers. Only, unlike most advertising venues, such as television and publishing, which consider the “customer” to be the advertiser, Google considers its users as its primary customers. And by keeping its users uppermost in its mind, it radically changed the business of advertising.

Just one example in the book underscores that adherence to a user-first philosophy. Although Google already had a successful keyword-bidding system in Adwords Premium where “the bulk of Google’s revenue came from,” it was wiling to change it dramatically. That is, some companies paid for premium placement at the top of a page of user search results, not unlike print advertisers who pay to have their full-page ad across from a magazine’s table of contents. Adwords Select keyword buyers were relegated to the “ghetto” on the side of the search results. But when premium ads had less than 1 percent click through, Google’s algorithms would swap them out for the less expensive but better-performing advertisement.

The company did this even though the premium advertisers were only paying for exposure not click-through. That is, Google would not be paid by the premium advertiser whose ads failed to generate interest from users. According to Levy, “The policy reflected the different philosophy Google brought to advertising in general. Google ads were answers. They were solutions.” That’s a radical change from a century-long philosophy that treated ads as, essentially, bait to lure customers.

This preemptive switch did not sit well with seasoned advertisers who thought they knew what good advertising was. But Google knew differently because they had the data to prove to them that their ads were failing even as bait because users did not click on them.

Reading about Google’s success as a business proves, once again, that the best business opportunities are not necessarily those that you have planned for in advance. Sometimes they just happen from circumstances. And another key lesson from Levy’s book is that if you have a clear understanding of who your customers truly are and have the data to prove what makes them happy, your chances for success might just surpass your wildest dreams.

Gadgets Are Not Platforms

November 22, 2011 in Mobility | Comments (0)

Four years ago Google’s Android operating system for mobile devices did not exist in the market. By Q3 this year, according to Nielsen, it surged to 43% market share in the U.S. smartphone arena and another research firm, Canalys, puts Android’s global share at 48%. Conversely, Nokia’s long popular Symbian mobile OS has been steadily losing ground in the mobile market. In the United Kingdom alone Android took nearly 20% of Symbian’s market share, dropping it from 26% to 7% market share in only one year. In the U.S. Symbian registers a minuscule 4% of the market.

I’m not here to praise Android or disparage Symbian. After all, Nokia itself has signaled the end of its venerable OS in favor of using Microsoft Windows Phone as the basis for its future mobile strategy. The company pushed Symbian as far as it could go and it was time to move on. We can only wish them well in their new approach.

My point, rather, is to underscore the acceleration at which new mobile technology is pouring into the market and how it can potentially undermine IT initiatives. If, for example, you were an IT executive who approved a project in 2008 built around Symbian when the OS held more than 50% global market share, you undoubtedly felt reasonably confident that its place in the market would guarantee long-term development from its owner and a robust third-party development ecosystem for years to come. Today, of course, you’d be working on a new mobile strategy.

But I’m suggesting that your new strategy should have as little to do with the handsets as possible. Sure, Apple’s iOS and Android look unassailable as we approach 2012 and, in some minds, are good bets upon which to build mobile enterprise applications. However, just as Android came out of nowhere to eclipse Symbian and even iOS in market share, it, too, can be readily bypassed with any of a number of mobile operating systems waiting in the wings.

Intel and Samsung, for example, are throwing their weight behind Tizen, an open source project hosted by The Linux Foundation, that will start showing up on devices next year. And let’s not forget Windows Phone. Some analysts believe it will rebound and take the number two market share spot behind Android by 2013. Let’s face it: building a mobile strategy around the flavor of the year handset OS is a losing proposition. You will never keep up.

The best long-term approach to mobility for business is not in the hands of your mobile workers. It’s inside the data center. IT needs to develop its mobile applications around a platform that is indifferent to the latest hot gadget, one that leverages mobile handset features, but also retains the stability of an architecture that sees a mobile unit as the presentation layer, not the foundation for enterprise mobility.

Not Another Disaster!

November 15, 2011 in Business Continuity,Disaster Recovery | Comments (0)

Winter is coming in the Northern Hemisphere. Summer is approaching in the Southern Hemisphere. Wherever you are, expect trouble from the skies, oceans, rivers, even the ground itself. Through blizzards, cyclones, tornadoes, heat waves, floods, earthquakes, and more, it seems the entire planet is conspiring against IT departments to keep their enterprises running.

If you believe the data, the risks associated with disasters–both natural and man-made–are increasing in number, ferocity, and cost. Last year insurers paid out $43 billion in claims due to disasters, dwarfing the $27 billion in 2009 losses. And, according to Swiss Re, the costs to the global economy from 2010′s year of “extreme weather events” and earthquakes were a mind-boggling $218 billion, up from a “mere” $68 billion in 2009. This year, in addition to the myriad floods, typhoons, and other natural disasters, insurers will have to add the horrific earthquake and tsunami that devastated Japan into their calculations.

It’s also possible that these losses due to natural disasters will accelerate in the coming years. According to a report from the Munich Re Group, scientific evidence suggests that climate change will increase the power and impact of both tropical storms and heat waves. “The projections are,” the report’s authors conclude, “that this trend induced by global warming will continue in the future.”

Unlike some business operations that are physically rooted to a particular geographic location, such as a power plant, IT has the luxury of being able to run its side of the business, at least temporarily, from almost anywhere. It can deliver services through offsite disaster recovery sites or through cloud-based alternatives. Yet, according to a survey published in September, 15% of data centers around the globe do not have business continuity plans.

That’s unacceptable. IT executives who put their companies very existence at risk through a lack of planning should, well, experience a career disaster before their companies have a real one. Penny-pinching CEOs and CFOs who hold back funding to implement such plans should also be called on the carpet for failing to protect shareholder interests. Company directors should demand to review IT business continuity plans on an annual basis.

There is no single business continuity solution for every IT department. Each enterprise will need its own. And business continuity systems can be complex to design and deploy. You need specialized expertise and technology to implement them properly. But they are critical. And they are an absolute requirement for today’s business environment because the outside environment can wipe you out in an instant. 

Marketers Need to Ramp Up Mobile Projects

November 10, 2011 in Mobility | Comments (0)

Put down your hype filter. This is not about some promised future about mobile or location-based marketing. It’s about opportunities available to savvy marketing mavens today.

Gartner estimates that 85% of every mobile device shipped this year will be equipped with a web browser. The availability of browsers on handsets are leading to increasing user comfort levels with online services, including search. Forrester says that 13% of the U.S. population searched the Internet last year with mobile devices and predicts that amount will more than double to 28% in 2015. (Americans, compared to Asians and East Europeans, for example, are notoriously slow adopters of mobile services, so this is impressive.)

Google claims that in the past two years mobile search has grown 500%, comparable to the growth rate the company experienced in the early days of desktop-based searching. Its revenue from mobile advertising will hit $2.5 billion in the next twelve months, the company says.

Search-related advertising isn’t the only beneficiary of mobile marketing opportunities. One venture-backed startup, LocalResponse, tracks social media to see who has explicitly checked in to a physical location via sites like Yelp and Foursquare or implicitly by, say, tagging photos with geographic data and posting them online. It then can feed advertisements through tweets on Twitter to smartphone users related to their location. It’s getting about one billion “check ins” each month. According to the company, less than 1% of users opt out of the service.

But before you jump into the mobile marketing fray, make sure your back end is capable of handling what your promotional efforts deliver. Back in 2009 another research firm, Gomez, surveyed 1,000 mobile users about their experiences with retailers’ mobile websites. Performance was their number one complaint about retailers online presence. Unresponsive websites would only get a couple of tries before 85% of those surveyed said they would give up. Worse, for those sluggish sites, 40% of users said that, now that their interest has been aroused, they would go to a competitor’s site instead.

Getting consumers excited about a mobile marketing promotion is great. Not being able to satisfy that excitement because of a balky website is disappointing. Losing that customer to a competitor with a better online experience, well, that’s tragic. So make sure you’ve got the infrastructure to handle the demand your online promotions will generate.

Advanced Analytics Goes Mainstream

November 8, 2011 in Analytics | Comments (0)

The Data Warehouse Institute says 85% of organizations it surveyed earlier this year plan to be using “advanced analytics” within three years. That’s more than double the 38% who say they currently do so.

TDWI defines advanced analytics users as those who use “long, complex SQL statements,” predictive analytics, in-database analytics, columnar data stores, and other state-of-the-art tools and techniques.

Why now? Why this sudden surge in the appeal of advanced analytics? After all, most of these capabilities have been with us for decades. For example, Sybase pioneered column-based data stores in the 1990s.

Well, no surprise, Big Data is behind it all, says TDWI. Everyone is awash in it and the traditional OLAP-bound data warehouse is not up to the Big Data task. Corporate strategists realize that Big Data might just kill off enterprises that can’t adapt to our new zettabyte world, so they are pushing their companies to adopt modern techniques to exploit the information deluge.

But there’s something else going on here in addition to the arrival of Big Data. And that, I believe, is the maturity of advanced analytics platforms. I can’t speak for our competitors (Critique, yes. Speak for, no.), but Sybase IQ cut its teeth with users who were willing to push the analytics technology envelop as far as possible. These enterprises were more than willing to invest the time in deploying a new platform and learning new tools because they envisioned extreme competitive advantage. We continue to work with these companies today, tugging the tech envelope further along together.

Most companies, however, are not so adventurous. They watch carefully what products have staying power in the market. They adopt technology slowly, cautious about the upheaval it might inflict inside their organizations. These days, however, the upheaval advanced analytics will cause is likely to be in the new business opportunities and cost-reductions companies discover once they use the new (to them) tools.

Advanced analytics is well established, long proven, and rock solid. Its technological maturity makes it possible for more conservative, slower-to-adopt enterprises to deploy the systems. But, if this TDWI prediction is true, and the market is about to see runaway adoption in the next three years, another problem may arise to slow it down: talent.

Companies that wait too long to jump into the advanced analytics waters may find that their competitors already have grabbed the best people to run their new platforms. McKinsey & Company estimates the shortfall of “deep analytical talent positions” to be as many as 190,000 in the coming years.

Perhaps it would be wise, then, for companies planning to embrace advanced analytics in the future to think in terms of months not years for their rollout plans. If they wait too long they may not be able to attract the people to manage them.

One Billion Customers

November 3, 2011 in Analytics,Data Quality | Comments (0)

The world’s population is said to have reached the seven billion mark this week. To celebrate this milestone the good old BBC has published an online utility that allows you to calculate your relative position amongst the seven billion inhabitants of our planet. Apparently, at the time of my birth, I was the 3,593,906,144th person alive.

Some marketers must be salivating at the possibility of reaching seven billion potential customers. And with our increasingly interconnected world, that may not be mere wishful thinking.

Back when China opened its market to outside companies there were lots of breathless articles about the opportunities a market of “one billion customers” presented to business. A popular book with that title even detailed one businessman’s experience dealing with the Chinese market.

In truth, China’s one billion+ citizens are not the customers of any single enterprise, except the government. As in the other billion-person nation, India, consumers there are fragmented by their preferences and circumstances. Companies may be able to call millions of them customers, but not one billion. Not yet.

One billion customers is a number that is hard to reach for any single company. However, there are businesses that are beginning to touch one billion people. According to comScore, Google’s user base reached one billion last May. While Apple claims it has had more than one billion customers visit their retail outlets. And Facebook, of course, is rapidly approaching the one billion member mark.

Surely, these are unique companies, but they also represent a trend. Steve Blank, who teaches at Stanford, says our new interconnected era means “companies that have real potential can win huge — by building around a customer base of possibly billions.”

Managing the information amassed on one billion customers requires a rethink of how we build IT systems and applications that will make sense of the mountains of data we are collecting. From a technology prospective, we will become much more reliant on in-memory computing engines that will allow linear transactional scalability and “real” real-time analytics capabilities running seamlessly against the same data. Equally important, you will need “agile” business processes to assure that data quality is flawless, carefully managing the information from the first tap on the keyboard throughout the entire data lifecycle. The cascading effects of poor processes on data quality with one billion customers is frightening to consider.

Even if you don’t have one billion customers, constantly attacking and solving data quality issues should always be a primary goal of IT leaders. After all, if your company has one billion customers in its future at all, it will happen only if you know how to manage your data quality.

Queue Busting

November 1, 2011 in Mobility | Comments (0)

Stop me if you’ve heard this before:

Comrade 1: “I want to sign into the queue for a car. How long is it?”
Comrade 2: “Ten years from today exactly”
Comrade 1: “Morning or evening?”
Comrade 2: “Why does it matter?”
Comrade 1: “A plumber is due in the morning.”

Okay. Maybe that’s not as funny as when citizens in the Soviet Union told the joke to cheer each other up. Waiting in queues is boring, so having a good humor helps. In most major cities queuing up for services is just a fact of life.

But I came across one large South African bank on a recent trip that has taken the inevitability and boredom of an urban queue and turned it into a creative and successful marketing program. This company has rolled out an innovative customer recruitment campaign, called “Queue Busting” internally, to sign up people who don’t already have bank accounts. The bank has deployed 600 agents with smartphones to sign up new customers while they were queuing for something else entirely.

It’s a brilliant plan. For one thing, unlike the population in a Soviet queue, people waiting in line today for such things as movie tickets, restaurant seats, and, of course, Apple product launches, probably have disposable income and might be ready for bank accounts and credit cards. Exactly the kind of people this bank wants for its customers.

By having face-to-face encounters with customers, agents are employing “one of the most productive” sales methods known: eye contact. You can’t do that over the Internet or on the phone. But you certainly can use it with bored people standing in a queue.

I’m happy to say that this innovative company used the Sybase Unwired Platform (SUP) to develop this eye-opening innovation in mobile commerce. Although our technology is the platform, it’s the creative use of it that impresses me. The bank’s 600 agents use smartphones to capture images of an applicant’s identification documents and to connect to the backend systems that are used to enroll the new customers just as if they were sitting at a desk inside a bank branch. The bank also deployed Afaria for device management and mobile security, offering the same level of control of the data as they would have inside four walls. What was once a long-winded process to sign up a new customer can be completed in minutes while waiting in a queue.

I’ve seen some splendid implementations of SUP and Afaria over the years–in everything from field service to logistics–but this one strikes me as one of the best. It’s a simple, yet effective initiative. And, joking aside, the folks at the company are laughing all the way to the bank.