www.nickhodge.com

The recent escal­a­tion of rumours sur­round­ing the so-called Apple Tab­let / Slate / Big iPhone / xxx (where xxx is a super cool Apple-ish name) seem to focus on the hard­ware. The gad­getry. The hard­ware specs.

I am a little over gad­getry. Every week there is a new phone, device or somesuch that junks the old tech­no­logy. Surely this is neither eth­ical nor sus­tain­able?

But that is not where the innov­a­tion, nor the future lies for Apple. Recent Apple acquis­i­tions, invest­ments and suc­cesses leads me to con­clude that Apple and Google are about to square off. Not in search. Search is rather bor­ing and a commodity.

In the forth­com­ing weeks, ignore the hard­ware. Hard­ware is dime-a-dozen, and many vendors are going to release slate like gad­getry in a sim­ilar form factor. Rather, watch what Apple does with their iTunes / App store. Presently this sys­tem provides music, tv, movies and with the advent of the iPhone – Apps.

The next depart­ment for the store are news­pa­pers, magazines and books. Either sold as sub­scrip­tion, or with embed­ded advert­ising. Just wait.

The rev­enue model will appeal to the tra­di­tional main­stream media — so expect a con­tinu­ing ava­lanche of obsequious and self-serving cov­er­age. Not of the store — but rather the hard­ware. Embed­ded within these stor­ies will be the expect­a­tion of a holy grail. The holy grail of the future of print media, without paper.

Some­how, I doubt it.

Photo by TCM Hitch­hiker/Jason Jerde
The fol­low­ing is the per­sonal opin­ion of myself and is not a formal state­ment nor pos­i­tion of my employer

Firstly, think about news­pa­pers. They exis­ted from the 17^th cen­tury until the first dec­ade of the 21^st cen­tury on advert­ising. Using the money received from advert­ising, they fun­ded con­tent cre­ated by journ­al­ists and writers. The con­tent attrac­ted atten­tion (ie: eye­balls), which in turn attrac­ted more advert­isers. A vir­tu­ous circle.

News­pa­pers will not com­pletely cease to exist; how­ever both their busi­ness model and lack of envir­on­mental sus­tain­ab­il­ity – and most import­antly, lack of atten­tion, will chal­lenge long term strangle-hold of power.

Now, think about Google. Star­ted in the first dec­ade of the 21^st cen­tury. Using money received from online advert­ising, they fun­ded tools and applic­a­tions cre­ated by soft­ware engin­eers. Online, the cost of cre­at­ing con­tent is near zero, so every­one had the chance to cre­ate and share. These tools attrac­ted atten­tion in help­ing people find/sift/manage this con­tent. By provid­ing these tools, Google attracts and holds atten­tion, which in turn attracts more online advert­isers. A vir­tu­ous circle.

Tra­di­tional journ­al­ism will con­tinue to exist as open soci­et­ies demand inde­pend­ent, know­ledge­able voices. How­ever, who will pub­lish their stor­ies, and under what busi­ness model; is one of many changes hap­pen­ing in today’s society.

As more attention-time is spent online, the first model is under dis­tinct threat; as is any tra­di­tional attention-driven busi­ness model. The atten­tion is increas­ingly head­ing online.

Google has no dir­ect need to earn rev­enue from these tools and applic­a­tions dir­ectly. Using the online com­munity to adopt (via APIs, etc) these tools, modify and con­trib­ute – Google wins more atten­tion via the net­work effect. We have seen Google pro­mote browsers (Chrome) with advanced APIs (HTML5, SVG, Javas­cript) as a strategy to shift the plat­form off Win32/.NET, MacOS/iPhone and simple HTML4

It just hap­pens that Google’s model of soft­ware devel­op­ment is ortho­gonal to Microsoft’s model of obtain­ing rev­enue. As an added bene­fit, the model has the poten­tial to cripple their largest poten­tial com­pet­itor, Microsoft.

The effects of new soft­ware model will not dra­mat­ic­ally affect the major­ity of the tra­di­tional, sat­ur­ated soft­ware mar­ket­place. Microsoft will con­tinue to main­tain a rev­enue stream from tra­di­tional enter­prise plat­forms (oper­at­ing sys­tem, office, serv­ers, data­bases, CRM/ERP etc), but these are not long term growth busi­nesses. Growth will largely fol­low World GDP rather than accel­er­ate, as you would expect on a new busi­ness model. Growth at World GDP is merely a baseline

This is why Microsoft must, and is break­ing out of tra­di­tional software-licensing model into tools and tech­no­lo­gies such as Bing, Azure etc. Using the cash­flows of the cur­rent plat­forms to ensure a long-term and viable busi­ness. Struc­tural and product changes are already under­way as seen with Microsoft’s Online hos­ted applic­a­tions, and industry acquisitions.

The next 5–10 years is going to be an inter­est­ing ride, and Google under­stands their com­pet­it­ive mar­ket­place. And this time, Microsoft is the under­dog. I like work­ing for under­dogs. It makes life inter­est­ing.

Notes, follow-up:

• Henry Blod­get “It’s Time For Microsoft To Face Real­ity About Search And The Inter­net“
  (Nick) Henry has an inter­est­ing per­spect­ive on how Microsoft is fram­ing it’s approach to the inter­net wrong, stra­tegic­ally. Henry’s premise is that Microsoft should refo­cus as a pure enter­prise soft­ware play, and give up on the con­sumer inter­net busi­ness. This is cer­tainly an altern­at­ive not dis­cussed above; but this does seem like a growth by mar­ket­share strategy. When you are already a large player in a mar­ket, this does become dif­fi­cult without caus­ing more reg­u­lat­ory ire. Extend­ing from tech­no­logy moun­tain ranges, the new rivers of gold are too attract­ive to be for­got­ten. To suc­ceed Microsoft has to exhibit and execute a major mental/strategic shift without abandon­ing the cur­rent rev­enue streams.
  I read Steven Hod­son over at The Inquisitr has a sim­ilar per­spect­ive as mine above, although com­ing from a dif­fer­ent angle. Don’t under­es­tim­ate the attract­ive­ness of rivers of gold.
• Michael Gold­haber, “The Atten­tion Soci­ety“
  (Nick) In post-industrial soci­et­ies the scarce resource is atten­tion. Grabbing atten­tion, such as the H1N1 Influ­enza Pan­demic is at the time of writ­ing, is valu­able. In the above text, I make men­tion of the Atten­tion Eco­nomy, or the mech­an­ism of mon­et­iz­ing the atten­tion of soci­ety. Once, as people sat down to tele­vi­sion after work: con­tent pro­viders could sell this atten­tion. (Advert­ising is primar­ily a mech­an­ism for obtain­ing attention).

Photo by bootload/Peter Renshaw

The Opera. Stages filled with ladies singing in a gruff ger­manic or romantic lan­guage, and men pran­cing around in col­our­ful sol­dierly uni­form. Stor­ies so simple yet obscured by lan­guage; thank­fully the Play­bill™ details the plot. Plots of love lost and fam­ily betrayal, have remained unchanged in some instances for cen­tur­ies. The audi­ence silent in the stalls, listens and applauds at the appro­pri­ate places. It is all scrip­ted and fol­lows a well worn path.

Strong scripts, strident soar­ing songs and stand­ard­ised char­ac­ters are repeated year after year to an audi­ence that dresses up to show off their cul­tural status. Baby boomers, once the bas­tions of cul­tural icon­o­clasm, now flock to the safety of the opera. The safety of the known story provides suc­cour in a troub­ling and con­fused world.

The Opera is an appro­pri­ate mir­ror of a slowly declin­ing, old power struc­ture: stand­ard­ised stor­ies with a strong cul­tural under­stand­ing of expect­a­tions. There are few sur­prises, and the act­ors faith­fully rep­res­ent the char­ac­ters as writ­ten. To stray from the cul­ture will res­ult in review rebuke, and poten­tially fin­an­cial ruin. The utter­ances are known, and everything fits into the story.

In the mod­ern, hyper­con­nec­ted world where every­one wants to write their own scripts; to merely ape an old opera is stale. It no longer res­on­ates, nor does it excite. The worn path may provide tem­por­ary com­fort: but does not provide long term sustenance.

At the opera, the generously-proportioned female singer has begun her last stanza.

The Cir­cus. I remem­ber the cir­cus arriv­ing in our small coun­try town. I, and the hoard of kids and teach­ers tramped down to the town’s foot­ball oval to oggle. The anim­als we eyed were from a dis­tant con­tin­ent. Lions, Tigers, Bears and Ele­phants. It was like a zoo, but the anim­als were smel­lier and close. Eat­ing and stomp­ing close.

Tra­di­tional cir­cuses such as these are now rare. Cir­cuses with the animal mena­gerie are rarer, as they have been houn­ded out of our towns by animal lib­er­a­tion­ists. A tra­di­tion, as cul­tural as steeple­chas­ing, has van­ished into the mist. The anim­als are happier.

Mod­ern cir­cuses are about people. The anim­als have been sequestered and retired to zoos and forests. Cir­cuses such as Quebec’s Circ du Soleil give a medi­eval com­media dell’arte a mod­ern fla­vour wrapped in a bright coat of 21^st cen­tury glob­al­ised com­mer­cial­ism. Com­pletely com­prised of people, fran­chised to a cul­tur­ally flattened world; there­fore stand­ard­ised to high­light human per­form­ance. These cir­cuses are for people, about people and make a point of break­ing the third wall to stretch the entertainment.

In more tra­di­tional cir­cuses, clowns would reg­u­larly break the third wall. Throw faux water, in the shape of con­fetti, into a faux sur­prised audi­ence. The cir­cus enter­tains, as the sad clown provides a reflec­tion on our mixed up, com­plex lives.

This forest we are nav­ig­at­ing through: Social Media, is like a cir­cus. It is a human cent­ric insti­tu­tion, wrapped in new tech­no­logy zeal with a hoard of clowns, mum­mers, so-called ring lead­ers and high-wire acts all scream­ing for your atten­tion, laughs and money. Dif­fi­cult to ignore when they are in town; and they can be smelly at the approach. Bright Lights! Shows! High wire acts with stars hav­ing incon­gru­ous names. Social Media has it all.

A true cir­cus extends out from the focus on the tent and the high­wire of show night. The can­vas rig­gers and animal train­ers trans­form into the spruikers of side-show alley. Crafty games of shoot­ing, prowess of strength and pre­ci­sion take a fool from their money. Fairy floss, candy apples and for­tune tell­ers return a future of rot­ten teeth and rot­ted minds.

In a sim­ilar way, Social media has a pleth­ora of spruikers. The games they advert­ise remove you are after your gold. Some of these games have a large pay off; sadly many don’t.

To really enjoy the cir­cus, you must exper­i­ence the whole show, not merely snack on the fairy floss and candy apples.

Social net­work­ing is more than the latest crazes of Twit­ter and Face­book. In fact, it pred­ates blogs. And the WWW, even if you could hand-code HTML. Even before the inter­net escaped from the uni­ver­sity cage and it’s train­ers, there have exis­ted “social medias”. Email, Bul­letin board sys­tems, Talk-back radio. Small news­pa­pers and magazines; tele­graph wir­ings and Morse code; pamph­let and book pub­lish­ing. All add to the social dis­course. In fact, since the demo­crat­isa­tion of com­mu­nic­a­tion that began with the print­ing press: where thoughts in the form of words could be etched and pro­duced enmasse; a social dis­course has existed.

What is dif­fer­ent is the con­nectiv­ity we all enjoy. We all are a few steps away from the human­ity that encom­passes the planet. At once in one large, multi-cultural cir­cus. No one mono-culture can exist. Gen­er­al­iz­a­tions break down as indi­vidu­als assert their indi­vidual char­ac­ter­ist­ics, sub­vert­ing the propensity for tra­di­tional hier­arch­ies to clas­sify, box and bucket.

The impact of this indi­vidual yet share instant exper­i­ence is being being felt now across busi­nesses and gov­ern­ments. Unre­lent­ing forces for change are singing strident tunes from the opera, whilst the cir­cus clowns laugh in mock humour at the futil­ity on the grave of the generously-proportioned female vocalist.

Loaned to me from a stra­tegic think­ing friend, Shell Global Scen­arios is a hefty, yet easy to read ana­lysis of really big (mega-) trends over the 15 year time horizon.

There is lots to think about; their three forces (mar­ket incent­ives, com­munity, coercion/regulation) and how there are “two wins, one loss” out of the choices.

In sim­ilar quad­rants, there are three object­ives of soci­et­ies (effi­ciency, social cohe­sion, secur­ity). Again the same choice mat­rix appears to describe a soci­ety. From forces and object­ives appear Open Door, Flags and Low-trust Glob­al­isa­tion group­ings. All of this MBA-level pretty pic­tures and frame­works leads down inter­est­ing paths, and com­ing from Shell there is a con­sid­er­a­tion of energy needs; how­ever this is not the primary focus.

On page 120 (sec­tion 6f) the power of “Net­izens” is detailed. A case example of Chinese reg­u­la­tions chan­ging based on internet-based act­iv­ism. The recent anti-Japanese sen­ti­ment, a neg­at­ive rather than pos­it­ive out­come, sourced from net­izens in China is shown.

Most telling is a quo­ta­tion from Izumi Aizo of the Insti­tute of Hyper­net­work Soci­ety in Tokyo:

“Mobile tech­no­logy is a source of fun­da­mental change — mean­ing the capa­city to be con­nec­ted whenever and whereever. This enables people to act imme­di­ately, either polit­ic­ally or socially. It is still too early to inden­tity the full con­sequences of this phe­nomenon, but it can be a major source of changes in the rela­tion of people to each other. It already has a major impact on Islamic counties like Iran, Afgh­anistan and others.”

The same pull-out details a sum­mary of what we net­izens are in the midst of right now, and I will para­phrase: the struggle for inform­a­tion power. The old insti­tu­tions wish to put the inter­net genie back into its bottle, to regain the power. Fil­ter­ing, File-sharing, pat­ents and copy­rights battles are prox­ies skir­mishes in a much lar­ger, cul­tural war.

A pos­sible gov­ern­ing prin­ciple will be self-regulation, with bottom-up stand­ard setting.

I first met Stephen Elop dur­ing Macromedia/Adobe integ­ra­tion talks and sub­sequently in Punta Mita, Mex­ico. He is one smart cookie for a Canadian.

Now here is at Microsoft lead­ing the busi­ness soft­ware side. Watch this video to get a glimpse of the future of tech­no­logy in our lives. The key theme I can see is the import­ance of a User Exper­i­ence that scales across dif­fer­ent devices.

Marc Pren­sky inven­ted the concept of Digital Nat­ives and Digital Immig­rants, now used by all and sun­dry to describe gen­er­a­tional change.

I would like to extend this into a concept of Ana­log Refugees.

These are people who have been forced to leave their Ana­log world and forced into the digital realm.

In the Wall Street Journal today there is an art­icle on recent con­sumer research which shows that the world is not chan­ging it’s tail.

“The Long Tail” pos­its that all products are equal on the Inter­net. A state­ment with which I agree: at the begin­ning all ideas, products are equal.

The research, from Pro­fes­sior Anita Elberse, states that there are still “hits” on the inter­net that reflect human’s social beha­viour. A state­ment I also heart­ily agree with as cer­tain products are deemed “hits” whilst oth­ers are “misses” and many are ignored as they lie hid­den in the wastes of elec­trons. If one per­son in our trus­ted social net­work states that “product/film/artist is way cool”, we will prob­ably follow.

What is dif­fer­ent about the inter­net is that these trends are some­times sur­pris­ing, amp­li­fied and quickened.

Human beha­viour hasn’t evolved to adequately cope with the short­en­ing com­mu­nic­a­tion gap.

Online, decent­ral­ised, Organic. Three new words that I am find­ing ringing true.

Last week I presen­ted at the Vic­torian Branch of the IABC (Inter­na­tional Asso­ci­ation of Busi­ness Com­mu­nic­at­ors). Thanks to Dr Jen­nifer Frahm for invit­ing me, sight unseen, to speak. Onstage after Ross Mon­aghan from Deakin Uni­ver­sity and The Media Pod was a tough gig. There­fore, it was time to flip the con­tro­ver­sial switch.

A premise that I artic­u­lated was that “online, people smell the fake” – and from ques­tions and com­ments dur­ing Ross’ present­a­tion, this is of major con­cern to PR professionals.

How do organ­isa­tions com­mu­nic­ate both intern­ally and extern­ally in a PR-spin weary world?

To respond to this, I described an emer­ging job role: “digital com­munity spe­cial­ist”. Noth­ing new here; the idea stems from Laurel Papworth’s work over the last 15 years. What is new is that PR’s audi­ence is quicklu shift­ing to online/digital medi­ums (ref: ACMA Report 2006/7). People online can and will invoke the nuc­lear option (ref: Mark Pesce) And this is a nor­mal part of their lives. Online is as real as off­line. (ref: danah boyd’s research)

Organ­isa­tion can and must use social net­works to engage stake­hold­ers. Not using than use “fake names” or “brand names”, No astro­turf­ing nor sock­pup­pet­ing. Just as people use online net­works to con­nect with their friends, organ­isa­tions can use social net­works to make connections.

People con­nect with other people. One role of the new PR is to hire/foster real employ­ees to act on behalf of the organ­isa­tion online. Do not out­source this import­ant role. My sug­ges­tion is to find a star in the internal sales team, cus­tomer ser­vice team. An indi­vidual who is already online out of hours, who also under­stands the foibles of your organisation.

Empower your new ambas­sad­ors with the free­dom to con­nect, act hon­estly, and tell the truth. Provide tools to per­mit them to right the wrongs that all organ­isa­tions do.

The role of the new PR is to man­age the image these new digital dip­lo­mats. Be their internal cham­pi­ons and meas­ure their work.

Release your best ambas­sad­ors into the digital world.

Hyper­em­power­ment. The theme of Mark Pesce’s open­ing key­note at Microsoft Australia’s ReMIX 2008, ‘Only Connect’

Now avail­able in video form, and tex­tual form.