Commoditizing Software

And further by adding new tools to integrate code and problems, and codes written by multiple people.

Commoditization of Coding

The cloud- or industry-specific approach is another facet of commoditization involving product line extension -- where once there was one SKU, now there are many that give a vendor the ability to further penetrate the market.

Prior to industry-specific CRM, cloud computing or Software-as-a-Service was the ultimate commoditization of IT. Pay by the drink, don't buy anything other than your personal device, let some other party pay for the back-office administration and acquisition costs. It's hard to see how you commoditize further, but who knows? ..... ' 

Innovating out of Commodity Traps

In Innovation Excellence:
The commodity trap is a significant threat for manufacturers in premium market segments. It describes the tendency of competing products to become more and more similar, thus nullifying any competitive advantage that the high-end product might have had. The result is that products can only be sold on price, which can be disastrous for a market leader.

There are various standard reactions to this threat, none of which is sustainable. In this article we present an advanced innovation strategy which provides robust protection from low-price competitors.... " 

Digital Signage 2.0 Advances as Data Art

Good overview of the advance of digital signage.  We spent much time trying to understand its effective in store use.   Beyond retail grocery retail?  Perhaps.   " .... Their secret weapon is "data art," a new breed of highly creative data visualisation that uses business information to create real-time visual effects. So rather than resorting to a relatively dull amber ticker tape to communicate the latest stock market movements in real time, this data can now be presented in a far more engaging way through stunning visuals; for example — liquid gold to represent commodity fluctuations. ...  " 

Table Scalping

Table Scalping?  Love to watch how markets arise in the economy.  Whenever you see evidence of a scarce resource, whose price is being escalated by its scarcity or exclusivity, consider the implications.   Here a perhaps surprising example.  Via Economist M J Perry.

" ....  Back before there were smartphones, reservations at the finest restaurants went to VIPs, celebrities and walk-ins carrying a wad of greenbacks to grease some palms.

But now reservations are becoming a saleable commodity, as increasing numbers of companies create apps that, in partnership with some of the top restaurants in town, hold a table for anyone willing to shell out some extra cash. ... " 

Data as a Natural Resource

In the recent ACM Bulletin:

Matthias Kaiserswerth is Director of IBM Research - Zurich. ....

How would you expand on your statement in a recent blog post that data is the new natural resource, and what implications does this development have for computing?

Every time we record our lap time with an app, map directions online, or post photos on social media, we are creating a blizzard of new data. This is very exciting because today we have ways to make sense of all of this data like never before. Unlike in the past, when only statisticians and information scientists with supercomputers could crunch this data, now, thanks to cloud computing and mobile apps, we put these powers into everyone's hands. For consumers, this makes us powerful and the same can be said for marketers—in fact, it can be a significant competitive advantage. Just like countries that are sitting on top of oil reserves, gathering and making sense of data can generate wealth. Some of the data may also be a commodity. Therefore, it's really about how it is used and combined with other data. For example, IBM is working with police departments in the US to use data to predict areas in a city where crimes are likely to occur. Or with Watson, we are sifting through data to help doctors diagnose patients from a mobile device anywhere. That's powerful .... "

Smart Look at Hadoop and Big Data

Good piece by Tina Groves.   I have discovered that many technologists, especially in the small to medium sized businesses, do not understand the value Hadoop or Big Data.  Or how the methods work together with predictive analytics.  Here is a perspective from IBM, using their suite of tools.  Not universal, but useful to review.

It is also key to understand that analytics methods are most purposefully applied against decision processes. They do not always  need complex methodologies, but start with the simplest techniques, like visualizing data that is created by your methods.    Groves writes:

" .. For many people, big data is synonymous with Hadoop. Certainly, the ability to store and processing vast amounts of data on commodity hardware has fueled a new generation of applications. The synergies of Hadoop, fast and reliable internet and the increasing love for all things mobile have channeled heady investments in software as a service (SaaS) startups.

IBM understands the opportunity with Hadoop and addressing big data challenges. Early and continued investment in this area is why IBM has been consistently rated as a leader in numerous analyst reports, including the recent Forrester Wave on Big Data Hadoop Solutions. ... 

In the big data realm "data” means obtaining data as close as possible at the source, and then analyzing it for immediate action. IBM® InfoSphere Streams enables tapping into streaming data or data in motion where the throughput rates are from the thousands to millions per second. Whether that data originates from medical devices to monitor neonatal infants or from sensors to predict manufacturing yields, InfoSphere Streams has opened the door to exciting new applications of analytics. ... " 

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. I’ve been compensated to contribute to this program, but the opinions expressed in this post are my own and don't necessarily represent IBM's positions, strategies or opinions.  #MidsizeIBM

Facebook Zuckerberg Interview on VR

In Wired:  In particular the mention of virtual reality.  Thought leaders can drive fringe technologies very quickly to millions of people. Its hard to move them otherwise.   Talking about the Oculus acquisition.

 " ...  What made you feel that — just like you were saying a couple years ago that Facebook should be “mobile first” — the company should eventually be “virtually reality first”?

ZUCKERBERG: When you put on the headset and you try it out, you really do feel like you’re there within seconds. Then you realize that the system that’s delivering this experience is using commodity hardware with cellphone screens, and can be manufactured for a low number of hundreds of dollars, and this can be in a lot of people’s hands. It’s something that people talked about for a long time, but I think now the economics and performance are finally there where this could work.  ... " 

Procurement Freshly Examined

Bain looks at procurement in some detail.    A crucial issue in organizations:
" ... Rising commodity costs and volatility in input prices have become facts of life. Basic commodities are under pressure not only from their own higher demand but also from increasing alternate uses. Only a handful of commodities will likely result in real shortages and constraints, but no matter what business you’re in, rising prices and volatility will become the norm.

Executives are feeling the pain. In a recent Bain & Company executive survey, more than half of the respondents told us that cost pressures constrain their ability to make strategic investments (see Figure 1). That is a big issue for nearly all companies, given that procured costs represent between 25 percent and 60 percent of a company’s total costs, depending on the industry. We frequently find that procurement does not get a commensurate level of organizational investment ... "  

Toothpaste, Data and People at Procter & Gamble

An interesting and detailed article in Forbes on P&G's use of advanced data technology.  Note this work relates to another post I did about early attempts to deliver this kind of capability.  It was an idea we experimented with very early on and was supported from the executive suite down.  Large enterprises will increasingly have to make better decisions based on larger and complex data.    A surprisingly accurate view of what is going on there, quote below is just a taste.

" ... Procter & Gamble, the world’s biggest consumer products company, continues to be one of the leaders in the race to harness massive streams of data for managing a business better. The company has been profit-forecasting on a monthly basis for about 40 years, trying to predict components such as sales, commodity prices and exchange rates. But the amount of real-time data it has been able to process has increased vastly in the past three years, thanks to better software and Moore’s Law of increasing computing power. Now P&G borrows liberally from tools born on the Web: ubiquitous high-speed networking, data visualization and high-speed analysis on multiple streams of information. The tools allow P&G to make in minutes the decisions that used to take weeks or months, when data had to be collated and passed through committees on their way to the top.

With $79 billion in sales and 127,000 employees, P&G is on the verge of having everyone’s talents known and tracked, all information about sales decided at the executive level every week and production viewed in near real-time worldwide. The company talks in terms of increasing the amount of collected data sevenfold. The airy promises of networked technology are here, at a scale rarely, if ever, deployed before.

P&G has just started a “digital skills” inventory of its employees, establishing a baseline of skills, including how to get connected to the Internet, how to use basic collaboration and knowledge-exchanging tools for online meetings and mail, and how to tap into the company’s internal social network, P&G Pulse, for news and further training. There are higher expectations for more technical jobs, of course, or in grooming certain careers ... "

Cool Business Intelligence

From the upcoming TDWI World BI conference:

Cool BI: Outlook, BI Search  by Cindi Howson
If you think BI tools have become a commodity, think again. If you think you can tick along with your current BI tool standard, never to assess your portfolio again, then you are missing out on valuable innovations that are revolutionizing the way we think of business intelligence ... "

SaaS Sales Models

On varying sales models for software as a service ." ...  One of the commonly accepted myths of the Software as a Service (SaaS) market and the broader cloud computing environment is that it is inherently a high-transaction business. This view has been fostered by the rapid growth of many commodity-oriented SaaS solutions and public cloud services ... "

Railfax Data

A good example of using Tableau systems online, by Drew Robertson

Summary of Rail Freight Traffic from Atlantic Systems Inc.
Data through July 31, 2010 -- 30 W 2010
A Weekly Report of North American Rail Freight Traffic, by Major Railroad and Commodity

"One of the timeliest gauges of economic activity" - WSJ 1/10/2010 ... "

Evolution of the Google File System

From CACM. An interesting technical and historical piece about decisions made at Google to make their massive file requirements work on challenging hardware: ' ... During the early stages of development at Google, the initial thinking did not include plans for building a new file system. While work was under way on one of the earliest versions of the company's crawl and indexing system, however, it became quite clear to the core engineers that they really had no other choice—thus, the Google File System (GFS) was born ... Given that Google's goal was to build a vast storage network out of inexpensive commodity hardware, it had to be assumed that component failures would be the norm ... '.
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Coffee and the Artificial Nose

Short piece on coffee and the artificial nose. It was an area that we examined closely and tried to understand from both linking to the real world world of the agricultural commodity called coffee, and how it related to simulated process changes like roasting. I still have my doubts that these methods can yet detect the parts-per-billion requirements that drive coffee flavor. Still all these sensor improvements are worth following, the sense of detailed machine smell will ultimately be solved. Much more in this blog on the sense of smell.
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Stronger Flavors Continue to Surge

" ... The year in flavor will be heavily influenced by bitter, warm and earthy notes," said Kevan Vetter, executive chef at McCormick. "We see America's palates embracing stronger flavors -- high-impact combinations that are anything but subtle. For example, bold bitter greens will be appreciated for their assertiveness, tamed with the licorice-like addition of caraway -- one of the 10 pairings in this year's report. The warm and earthy duo of roasted cumin and chickpeas is another expression of the year's big flavors."

In this report from Gourmet Retailer. Seems a bit out of scope for this blog, but really not. In the 80s I was involved in a number of advanced food product blending problems, notably coffee. We used advanced modeling techniques to produce standard flavors at reasonable prices, based on a continually changing agricultural commodity. I am still an amateur chef. There continues to be a strong evolution towards bolder and stronger flavors in North America. I can remember when just a few drops of Tabasco was considered radical.

Social Media as a Commodity

Good piece by Dave Fleet posts on social media as a commodity. Anyone can provide it, but what do good clients care about when you provide the service?

Behavior Tracking Law

In the Washington Post, with broad implications:

' ... Google, the leading online advertiser, stated that it has begun using Internet tracking technology that enables it to more precisely follow Web-surfing behavior across affiliated sites.

The revelations came in response to a bipartisan inquiry of how more than 30 Internet companies might have gathered data to target customers. Some privacy advocates and lawmakers said the disclosures help build a case for an overarching online-privacy law.

"Increasingly, there are no limits technologically as to what a company can do in terms of collecting information . . . and then selling it as a commodity to other providers," said committee member Edward J. Markey (D-Mass.), who created the Privacy Caucus 12 years ago. "Our responsibility is to make sure that we create a law that, regardless of the technology, includes a set of legal guarantees that consumers have with respect to their information." ... '.

Disappearance of Corporate IT?

In CIO Mag, combative pundit Nicholas Carr predicts that corporate IT will be largely replaced by cloud services. Have not yet read the book whose premise this article outlines:

The Disappearance of Corporate IT
Controversial author Nicholas Carr says the network--the Internet, that is--has become, literally, our computer.

First Nicholas Carr dropped a bombshell of a book, Does IT Matter? Information Technology and the Corrosion of Competitive Advantage, which argued that corporate IT is increasingly becoming a commodity. Now he's back with a provocative new tome, The Big Switch: Rewiring the World, From Edison to Google (W. W. Norton, 2008), wherein he makes the case that IT as we know it may disappear completely ... "

Is Wal-Mart's IT a Commodity?

Nick Carr writes about Wal-Mart's IT, its distinctive capabilities and value, with lots of comments:

' ... " I never viewed computers as anything more than necessary overhead," Sam Walton once said. Nevertheless, after I wrote "IT Doesn't Matter" back in 2003, critics would routinely present Wal-Mart as the killer counter example to my argument that information technology rarely provides a competitive edge anymore. Wal-Mart had famously set itself apart from its retailing rivals, IT analysts would point out, by building a lot of highly customized IT systems that its competitors were hard-pressed to match ... Now, with commodity software greatly advanced, Wal-Mart's custom systems have turned from advantage to disadvantage, and the IT analysts have changed their tune ... ' .

Norbert Wiener The Father of Cybernetics

Itching to read Dark Hero Of The Information Age .... I read a few of Wiener's books, and the insight into our current age is amazing. Yet few people today, even those in the business, have heard if him. In the NYTimes review its mentioned that the Soviets thought highly of him, and I remember getting some English translations of Soviet work in 'Cybernetica' in the 80s that often mentioned his work. NYT suggests that ...information as a discrete concept did not widely exist before Wiener .. early Bell engineers referred to the signal traveling over telephone wires as 'the commodity to be transported by a telephone system' ... Intriguing, if true.