Android Gaining Share on Apple iPhone

The latest AdMob Mobile Metrics Report results are very interesting, showing the Android OS is gaining ground fast on the iPhone.

AdMob servies up ads for over 15,000 mobile Web sites worldwide.  They have recently published an analysis of traffic and usage trends on the sites they manage.  Full AdMob Report

Summary:

• Android as a mobile phone Operating System is gaining market share from 16% of smartphones in November of 2009 to 24% of smartphones in February 2010.
• In terms of mobile traffic by OS as seen by AdMob, iPhone has a 50% market share but Android is growing faster and is close behind at well over 40%.
• Laggards: RIM, WinMo, and WebOS are all in the low single digits for AdMob mobile traffic.

While the iPhone is more mature, full-featured and has more software applications (OK, “apps”), Android looks to have much faster growth at present.  The more interesting questions is why?  It all comes down to business model.

Reasons for Android’s Growth

• The “Less Than Free Business Model.”    Google does not charge to develop on their smartphone OS and does not charge to deploy on it either.  What’s more, Google actually pays ad splits to vendors who ship their operating system.   Google also lets carriers customize their customer UI and offers an open source version of Android should they need an “out.”  This is extreme market disruption.  See a brilliant write-up on the Less Than Free Business Model.
• Android, as a result, is supported by multiple device vendors.  iPhone is only available from Apple.
• Anybody can download Android and develop software applications on it.  Apple reserves the right to decide which of their software applications gets to market.  They rather famously denied Google the right to deliver Google Voice on the iPhone.
• Google operates very transparently with Android.  Apple is very very secretive with iPhone.

Let’s see…  I think I have seen this movie somewhere before.  Apple comes into a market with superior design and product innovation (Mac) only to be overtaken by a more open platform with a better business model (Windows).  In that case, openness drove down the cost of the platform hardware, which resulted in greater market share and more software applications.

It is certainly not to late for Apple to change their direction, but failing to act soon could be disastrous, and we are nearing the market tipping point.  And, by the way, we have seen Google tip markets on established market leaders before.

Cisco Borderless Networks

I attended the Cisco Borderless Networks launch last week and found it to be a really interesting and informative event.  Here is why this is not just esoteric network stuff, but will make the lives of network users easier and more productive.

Borderless Networking, Cisco’s term for their cloud computing architecture, goes way beyond just networking. In this architecture, the network itself becomes the platform for application services. Cisco’s version of the architecture includes the following:

• Networking
• Data Center
• Virtualization
• Communication and Collaboration
• Video

What is really interesting is that Cisco has delivered management and policy tools across the product line at the same time it was rolling out new products (see below for more).

Borderless Networks is a different style of computing. In the old style, businesses built and managed a set of applications such as Financials, Logistics, HR, Supply Chain, ERP, etc. and surrounded it with a firewall to keep the “bad guys” out. That no longer works because you could only be fully productive if you were inside the corporate firewall.

Today, there are a lot of people outside of the corporate firewall who need access to corporate data and applications. For example:

• Traveling and mobile employees. Example: Sales people.
• Work-at-home employees
• Consultants
• Supply Chain supplier/partners
• Channel Partners

In the new style of cloud computing, the network itself becomes the platform for computing and applications are presented as “services” on the network available to anybody, anywhere, anytime on any device. The obvious challenge here is to deliver these services with a high level of security, and that is a lot of the focus of the Borderless Networks architecture.

What do we mean by security?

1. Authentication: the network needs to identify who you are.
2. Authorization: once the network knows who you are, the network needs to establish what things you are allowed to do. Can you access a particular application / service? Are you allowed read-only privileges, or are you allowed to modify data? Which data?
3. Location Aware: The network will allow different privileges depending on where you are located and the security of your access method.

The key thing is that cloud computing is new with very few established industry standard defining what the term means. This will take years to play out.

Who is going to deliver Cloud Computing?

• Enterprises: Forward-thinking enterprises are moving to a cloud computing architecture for a lot of reasons, but the main on is to improve employee productivity and better integration with partners.
• Service Providers: Companies such as Google, Salesforce.com, and NetSuite are delivering applications as services over the Internet today.
• Cloud Computing Platforms: Other companies are operating computing platforms “in the cloud” and selling compute power, storage, networking bandwidth, etc. to companies who want access to applications without owning and operating all the complicated infrastructure underneath. Examples: Google, Amazon.com, Salesforce.com.

The important thing is that Borderless Networks and Cloud Computing are not just relevant to business users. They are widely used by consumers today who use cloud applications such as Gmail, Google Apps, Picassa, etc.

What Was Interesting about the Cisco Borderless Networking Announcement?

Actually, quite a lot. Cisco announced a refresh of practically all of its routers and switches, but interestingly, that was not the main focus of the discussion. What was more interesting (and emphasized) was that the new products were rolled out while at the same time implementing Borderless Network features called AnyConnect across its product line:

· Device Management: Cisco MediaNet knows what device you are accessing the network services with and can manage your interactions with the services in terms of the bandwidth and video capability of your device. Cisco can now construct video conferences with people using a wide variety of video capabilities from Telepresence, to desktop Web conferencing to smart phone video conferencing. They say they can support the 19 main types of video protocols in a mixed fashion.

· Security: Cisco announced TrustSec security management across its product line.

o Your Identity and security credentials follow you on the network. You do not have to keep logging into different applications and different network access point.

o The network is intelligent and knows when to prompt you to ask if you want to transfer from one access device to another. Such as when you walk into your office with a smart phone. The session is transferred with full security credentials, no additional login required.

o Multi-hop network security.  This has been a big problem for years.  In cases where the end-to-end network security solution involves multiple hops between network routers, there has been a problems with passing security credentials.  Cisco has a solution for multi-hop environments that will make secure access for mobile and wireless users much more robust.

o Cisco is working with Intel on MaxSec, a technology to extend the multi-hop security architecture to Intel devices on the network.

· Energy Management: Cisco has implemented EnergyWise energy management across its product line using Power over Ethernet (PoE). The network can power itself down and also devices attached to the network using PoE.

How Does This Change My Life?

There are a lot of technologies converging and integrating here to create a platform for network services. What this means for the consumer of services is:

• You will log in once and your security credentials will follow you.
• The network will be intelligent, allowing you to transfer your sessions between devices seamlessly.
• Collaboration will become easier to use and more integrated with other applications.
• Video will become more widely used for communication and collaboration.
• Video Conferencing will become a lot easier to use. It is really fun and productive today, when it works, but there can be complications. It is getting easier.
• End Users will soon be working is a world where public services from Google, Amazon, Salesforce.com and private services from their employers work together in everyday productivity.
• These changes will provide a big productivity boost to companies, schools and countries that implement them.

John Chambers spoke at the end of the session and said that he believes that Video is the new “killer application” for cloud computing: It is how we will work and how we will collaborate.

Cloud Computing has a long way to go before it reaches maturity, but this is a big step forward towards defining an architecture that is compelling and useful to IT departments, Service Providers and end users.

Resources:

Cisco Borderless Networks

Facebook Traffic Passes Google

Current numbers from Hitwise show that traffic on Facebook.com has surpassed traffic on Google.com  What is interesting is that this is a trend that is likely to continue, not just a one-off.

• Facebook traffic is up 185% year over year.
• Google traffic is up only 9% year over year.

So, what does all of this mean?

• To put it in perspective, this is just Google.com, not all of the Google properties such as YouTube, Picassa, and Google News for example.
• Still, the trend does point out the importance of social media.  The Internet is moving from a publishing platform to a vast multi-way conversation.  We are way past “fad” and well into” game-changing.”
• The trend is clear (see graph).  Social media is growth is going to continue to outpace traditional search.
• Much has been written about how important it is for search engines to be able to search for realtime information within a social media context as well as on the Web and it is happening.  The graph shows why.

But wait. There’s More: Not only is Facebook surpassing Google.com in traffic, another recent Hitwise study shows that Facebook users have a higher return rate than Google News.

There has been some suggestion that Facebook is becoming an important news reader.  I don’t think the studies I have seen so far can tell us how many of Facebook’s users are visiting for news, but it is interesting to note how the site has generated strong loyalty as measured by return readers.

Will social media as a news source disrupt Internet news the way Internet news has disrupted print news?  It is worth watching.

Why Companies STILL Make Mediocre Products

I just finished teaching a class in Product Management up at the University of San Francisco MBA program and I really enjoyed the experience. The 35 students in the class were very bright and came from a great variety of backgrounds, making the class all that much more interesting and exciting.

After weeks of telling my students to “listen to the customer” I am still freshly astounded to find in real life that something as basic as this is still not happening.

This past Sunday, I took part in a market research panel where I got to spend 3 ½ hours driving four cars and commenting on them. The market research company specifically picked me because I currently drive a Mazda3 hatchback.  OK. So far, so good.

Being somewhat opinionated, I was literally dying to tell them what I thought about current automobiles and my criteria for selecting an automobile. I love my Mazda3 and am highly critical of a lot of other cars that I see on the road today. Sadly, that was not to be. What I found when I got to the event was that the market researchers had a set list of questions and very little room for any input that did not fall into their question list – which the vast majority of my input did.

For two hours, I drove around with a market researcher in a variety of hatchback cars and literally buried him with my input on them. None of which he could capture because he had no mechanism to do so other than the highly structured set of questions he was required to ask me.

So what happened to listening to the customer? Sadly, even though these guys were spending a literal boatload of money, they were not listening to me at all. At the end I got paid $200 and I felt like I was stealing their money. They learned absolutely nothing about me or my true buying criterion.

Here are a few examples of what the Auto Companies might have learned if they had actually listened to me:

• I will not buy any car where the seat pan does not tilt. I have long legs and cannot get comfortable unless I can tilt the front of the seat pan up. None of the test drive cars were adjustable in this way. Instant disqualifier!
• I care a lot about gas mileage. 30+ mpg highway is a requirement for me. They never asked me about gas mileage at all. Amazing!
• They asked me to rate the four test cars against each other and they asked me about my current Mazda3, but they never asked the Big Question: Would I consider buying any of the four cars instead of a Mazda3 next time? The answer is an emphatic “NO” but they will never know that.
• They never asked me what my buying criterion for a new car was.
• They did ask me an extensive set of questions about the back seat of cars, which I told them I hardly ever use. Why?
• They never figured out that the reason I like hatchbacks is so that I can fold down the back seat and use the big cargo space, not for people.
• They asked me a lot of questions about the sound system, but they never actually let me touch the sound system in the cars. So, they will never know that I really care a lot about sound quality and require an iPod connector/charger. They asked me about road noise, but never made the connection between road noise and sound quality of the audio systems.
• They will never know that I will not remotely consider any car with a lot of gratuitous chrome crap on it. American auto manufacturers love chrome grills, chrome around the side windows, chrome door handles, and chrome accessories everywhere. Fail!

The truly heartbreaking thing is the sheer amount of money these people are spending to collect utterly irrelevant information. They brought 8 automobiles, booked an expensive hotel in Palo Alto CA, brought a large team of people, built a survey, brought PDAs to help them collect survey data and will be operating three groups of people per day for over a week, while paying participants $200 each for their help.

I wish I knew which auto manufacturer was paying for this study (I have a strong suspicion). If I did, here is what I would tell them:

• Actually LISTEN to your customers and have mechanisms to capture free-form information. They can and will surprise you with their input. It is how you will spot new trends.
• Stop trying to quantify everything! A lot of car preference is emotion.
• Good design is about about the whole experience; form, function, emotional response.  Not how I feel about the front fender on a scale of 1-10.
• Watch your customers use the product and notice when they are struggling. Like when I had trouble adjusting mirrors in one car, and could not adjust my seat to a comfortable position in any of them.
• Ask the key question: “Would you consider any of these cars as a replacement for your car and why or why not?”
• Ask they basic questions: What do you look for in a car? Why did you buy your current car?

Somewhere, in an office park far away, an army of quants is waiting to get our data, tabulate it, average it, cross correlate it, and run conjoint analysis on it – all to come up with the wrong conclusions.

Put away the PDAs, the spreadsheets, and the analytical packages and actually LISTEN to your customers.

Top 10 Ways to Make Advertising Useful and Relevant to Target Customers

Let’s face it, nobody is watching TV advertising anymore. DVR technology has put an end to anybody watching ads they don’t actually want to see. …And that is most ads in the known universe! The TV networks have responded by running more ads (up to 50% of total airtime during the 2010 Winter Olympics according to my unofficial estimates) and inserting images from the TV show currently being watched to “trick” viewers into stopping their fast forwards. Advertisers and TV networks are not getting the message: Viewers hate this stuff. It actually hurts the brand image of the advertisers and drives away viewers!

Now we are looking at the explosion of mobile network use and hearing that Apple and Google are gearing up to do mobile advertising. You can practically hear the collective shudder as people prepare to be bombarded with useless crap they don’t want to see. Well, it doesn’t have to be all that bad.

How can vendors do “advertising” in a way that does not turn off their intended audience? Here are ten ideas:

1. Make it Relevant: Have some good reason to believe that the target customer actually care about what you are dishing out.
2. Never SPAM: Never use personal information to promote an unrelated product or service.
3. Make it useful: Use personal information to determine a real unmet need, not just a possibility of interest in your product or service
4. Make it Immediate: Use personal and geo location information to provide useful information that might help the target user at that specific moment.
5. Give Users a Voice: Let them rank your ads for usefulness and relevance. …and listen to them. If they say “not interested,” never serve that ad up again!
6. Look into “Alternate Reality” Applications: They are small but fast-growing software application area that provides useful realtime information on people and places. Here is a real chance to provide very relevant and useful information while getting your message across in a gentle, non-advertising sort of way.
7. Don’t do something your target audience would not recommend to their friends. Annoying may be memorable, but it doesn’t help your brand.
8. Make it Viral. Make it something your audience is dying to forward or recommend. It makes them look cool and connected to do so.
9. Listen: Give your target audience a chance to talk back to you – and really listen to what they have to say. They may well surprise you.
10. Make it Fun! A fun message is far more likely to be well-received and to go viral. The Mentos-Diet Pepsi thing created a lot of interest for Diet Pepsi.

Whatever you do, do not continue to ram the same message down people’s throats over and over. Virtually everybody I know hates repetition, and particularly repetitive advertising!  Awareness isn’t  enough.  People have to actually like your brand.