Archive for the ‘Current Affairs’ Category

Oh bother.  They’re at it again.  I’m on the long flight from Boston to Dreamforce in San Francisco and I have a lot of time to think.  First stop is the Zuora user group meeting “Subscribed” happening at the Ritz Carlton.  It’s Zuora’s second bash like this and it’s nice to see them doing well with a great idea like subscription billing.

I am on a Virgin flight, which is my choice for these long hauls.  The plane is full of Dreamforce attendees and the excitement is palpable.

It’s nice to have the option of WiFi and power for my computer so that I can work.  Signing onto the go-go inflight wireless service is always something of a Gumpian box of chocolates, you never know what THEY’RE going to get and today is no exception.

Back in July I wrote a post on a similar Virgin flight titled, “Like a Virgin” that delved into the murky world of product pricing and it looks like this might become a thing for me because I am doing my own little inflation study on the price of WiFi.  If you need to catch up on my musings, you can click the link but a synopsis of my study from the original post is here:

Thanks to go-go’s record keeping, I am able to access my account history.  It seems in 2010, the first time I bought the service, I paid $12.95.  The cost actually went down for several flights after that either because they were running a special to get people hooked or, and this is a dim memory, someone was giving free or discounted service to all passengers during the holidays.

At any rate, my point is that the price of WiFi has gone up dramatically over less than two years.  Today I paid $17.95 for the same service I once paid $9.95 for.  Off the base of $9.95 we’re looking at an 80% increase and divided over two years that produces a 40% inflation rate.  Yikes!  Looks like the increasing cost of Internet is tracking the plane’s altitude.

Ok, so back to today.  Want to guess what WiFi costs today?  Today I plunked down $34.95 for a month because I am going to do this a lot this month, but a single day has a cost of $24.95 and a single day is the benchmark.  Going from $17.95 to $24.95 is a rise of a bit more than 33%.  Presumably they were making money at $17.95 and now that the equipment is fully amortized the additional fee is pure profit.

I know, the fee indirectly includes the free electricity for my computer but I prefer to think of it as something they throw in for the cost of a ticket since I could use the plug for anything else like charging my phone.  But if I am charging a phone and not using WiFi then am I technically freeloading on the WiFi users?  It gets complicated.

At any rate I think I’d have to go back to 2010 when I started using WiFi on these flights.  If you go back to the July post you see that I started paying $12.95 then it went to $9.95 before beginning its inexorable climb.  So take your pick.  I have to keep my socks on here so my math might be off but it looks like at least an inflation rate of 100% over two years.  But more interestingly, I know I am not paying double the cost of a ticket that I did in 2010 even though jet fuel is up considerably in that time.  Again some quick math with shoes on.  The cost of WiFi is now roughly equal to 3.8% of the ticket, not bad at all or about six gallons of jet fuel.

Ok, but like an economist I know there is more than one way to calculate this inflation rate.  Consider this: The cost of WiFi is so high now that they’ve come up with a new entry point, a ten dollar cost for one hour of service.  So that’s ten bucks an hour but when this started in 2010 it was ten dollars for the whole six hour flight or about $1.50 per hour.  If you use 12.95 as the basis then the cost per hour is more but no matter, this is back of the envelope stuff.  But the change suggests an inflation rate of 600%.  Six hundred percent!  Oops!  I really meant 300% per year over two years.  Feel better?  I do.

Well enough of this I am signing off from somewhere over Wisconsin traveling at 422 mph at an altitude of 36,199 feet.  It’s -73 degrees outside and $24.95 inside.

Sage Hits a Milestone

Posted: September 5, 2012 in CRM, Current Affairs
Tags: , ,

Today Sage North America announced the 25th anniversary edition of ACT!, the contact management software.

What were you doing for a living 25 years ago?  That would be 1987 and I can remember vividly.  I was selling software for a company whose offerings ran on DEC VAX and PDP-11 mini-computers.  We had a fax machine, VT-100 terminals on everyone’s desks and we were thinking about getting a phone system.  Remember those pink message slips?

The VAX was the primary development machine and it hosted all the people in the company for things like word processing and spreadsheets.  My company had been founded by a smart programmer which meant the VAX was his and we just lived on it.  Whenever he wanted to compile a program the lights dimmed, screens froze and we went out for coffee.

I saw an ad for ACT! in an in-flight magazine next to some ads for steaks flash frozen in the mid-west and rushed to your door.  As a sales guy, the load of paper on my desk and in my briefcase was killing me.  I’d experimented with keeping data in a spreadsheet but it seemed like more work than it was worth. I’d also recently taken a relational data base course and dreamed of a simple database that could track my contacts and remind me when to call them again.  I’d gotten far enough to convince my SE to write something like it.  I almost got fired for using precious resources in such a profligate way too.  Good thing I was crushing my numbers at the time.

Ah, the good old days.  I looked at the ad with longing but knew that our CEO would never let a PC into the building and ACT! ran on DOS so all I could do was look and wonder when I’d be able to get my hands on it.

Twenty-five years is a very long time in this industry and it is a testament to ACT! and Sage and Pat Sullivan who invented it that ACT! remains relevant.  Sullivan got it mostly right when he built the first version and Sage continues to keep it relevant for a large and loyal customer base that needs just what ACT! delivers.  Congratulations to Sage.

Every now and then I write something completely off base from my standard fare about software, technology and business.  This is one of those times, the following post has absolutely nothing to do with CRM so you don’t need to read it if that’s what you’re here for.  This is simply about some cultural observations that I wanted to write down.  Some times you just need to scratch an itch.

As a casual viewer of cable television over the summer I’ve noticed some similarities and wonder what they mean.  Summer Olympics changed my viewing habits, which I suppose is the reason networks bid so much for the right to carry them.  Upend the established viewing pattern and you can find you’ve changed your place in the pecking order.  Chants of “USA, USA” turn to “We’re number 1!” in viewership if you are lucky.

In my case this worked rather well but the losers were all the established broadcast networks, including NBC, which spent a small fortune on broadcasting the Olympics, and the big winners are shows on cable with smaller followings.  I found the new shows more to my liking and more important, it was possible to watch a whole season of reruns in a few nights and move on to yet another good new cable show.

The shows I’ve glommed onto are Californication, Boss and The Newsroom.  Say what you want about my taste and my politics, I don’t care.  This piece is actually trying to be the kind of literally analysis I vaguely recall from college.

To me, all three shows use as their basic theme the Faust legend.  That’s the old story about a man making a deal with the devil; usually but not always, the story involves a smart person auctioning off his soul for all eternity for a few years of earthly bliss.  In the story the devil has the power to grant temporary riches, strength, beauty and intelligence and the recipient accepts the offer and promptly goes on one heck of a bender for, let’s say, twenty years.

Admittedly, that sounds like a bad deal these days with little discussion of options, renewals, and syndication or out clauses.  But that’s the charm of the premise and the three shows examine, in one way or another, how the protagonist deals with an increasingly bad deal.  To make it interesting, each show in its own way concentrates on the main character’s efforts to either deal with a bad hand (the twenty years is almost up) or simply slog through what passes for happiness.

The latter is a fair summary of Californication.  In this show, which has five seasons under its belt, the protagonist, Hank Moody played by David Duchovny, is a former east coast college professor of literature who’s written a couple of novels.  Moody relocated to California about many seasons ago to accept Big Money for screen writing gigs and to pursue his interests in Porsches, brown liquor and easy women in any combination you, or the writers, care to imagine.

Although he’s been at it for years, Moody still cruises through southern California with a mix of incredulity and aplomb, which is not to say comfort.  He’s out of his element and can still be surprised by what he sees but he fakes it admirably, there are many times when he’s a pilgrim making little progress.  This is especially true when dealing with his ex-wife and college age daughter, girl friends who want to get serious, or, heck, any female love interest.

Moody’s deal seems to be that he can enjoy any wonderful thing he wants but he can’t truly have it; he can sample but not possess.  So he visits the Ex- but doesn’t get any, drives his agent’s Porsche, has forbidden sex with a gangster’s girl, and generally tempts fate.  He even landed in prison at one point.  Not to worry though, his contracts seem to renew regularly and he is never in real mortal danger.  Perhaps we need to wait a few more seasons.  Moody is still playing out the deal he made with impunity.

Then there’s Boss, Kelsey Grammer’s very good if slightly unbelievable production based on “what it must be like” to be the mayor of a mythical Chicago.  As political shows go, this is not The West Wing.  It’s all about angles and calculation and nary a word about the better angels of our nature.  It is the first show I am aware of that makes a main character Democratic politician into a bad guy.  I have always wondered if this show was financed by someone like the Koch brothers — Look that’s the real Chicago!  Sure, Obama has a U.S. birth certificate, but look at his political roots!  (I know what you might be thinking, but if you don’t like this one, write your own.  This is mine.)

More accurately, Grammer’s mayor, Tom Kane, is a kind of anti-hero.  Kane is in the early stages of the devil’s reclamation of his soul.  After one full season we know that he has an incurable degenerative brain disorder and it almost seems like he is, at times at least, trying to make a few things right before the long good night.  Breaking good?  That’s not allowed.  He’s been mayor for about twenty years and he’s driven forward by his wife who is the daughter of a former mayor of similar long standing and curiously, similar dementia.  The daughter/wife seems to be the one with steel in her spine Grammer just plays the role at city hall.  She is the guardian assigned to keep tabs on the devil’s investment.

Boss is well acted and well written if it is a tad unbelievable in the gangland depictions of some activities in Chicagoland and the gratuitous sex which is designed to simultaneously depict the sterility and animal passions of this political world.  Boss is a classic examination of the idea that the ends justify the means.

Finally, just arrived this summer, is The Newsroom, a show about the news department at the number two rated cable news channel.  One of the many great things about this show is its creator and primary writer, Aaron Sorkin, who has The West Wing, Sports Night and The Social Network on his resume, and that’s just for starters.  The show is great fun to watch because it is cut like a good movie with long flashbacks and other techniques designed to make you think.  It is also written over the real news from about a year ago.  Nothing fictional about the script’s fiction except how these characters handle the moment (with some help from Sorkin’s hindsight).

If Kane shows a Democrat as a bad guy, The Newsroom takes equal liberty to portray the show’s anchorman, Will McAvoy played by Jeff Daniels, as a Republican and something of a real intellectual.  McAvoy’s positions sound so progressive and so reasonable that Sorkin feels obligated to remind us from time to time that this is a Republican because we certainly don’t get it from the script which is focused on extremists.  Is this what it used to be like?  Can we have it back?  Not so fast.

Deeper examination shows a journalist who is totally and finally fed up with the mess the political discourse has made of his beloved news.  He’s a burned out ghost walking through the halls of his former life and part of the show’s recurring plot is an attempt to get him back.  This is made clear in the opening credits as images of Chet Huntley, Walter Cronkite and Saint Edward R. Murrow parade through along with an animation of Sputnik.

Those must have been the good old days of high minded broadcast journalism unfettered by analysts and ratings.  Sorkin makes sure to also point out that the news back then was, in Stephen Colbert’s phrase, “newsier” and less polluted by self-promoters and flat earth theories.  But isn’t that what nostalgia is all about?

In some ways, The Newsroom is the biggest homage to the Faust legend because it shows the viewer that you are part of this too, this mess is yours and that’s the point, I think, of all these shows.  If the society we live in smells like a dead fish it is our dead fish collectively.  But Sorkin is too good a writer to let you know that he knows you know so the plot is much less obvious than Californication.  Heck with a title like that can anything be subtle in that show?

So Will McAvoy has done multiple deals with the devil.  The show opened with him a bit burned out from trading his Serious Journalist Cred for ratings — say it ain’t so!  The opening makes a believable connection between the way we are and the way we as consumers of the news have let journalism slide.  The series is set around the very American premise that you can get your virginity back if you do an about face on all that is here and head west.  In this case to go west is to say, screw the ratings, LET’S DO THE NEWS!

It hasn’t been that simple since they closed the frontier in 1890, alas.  The one percent still want to eat, after all.  Jane Fonda as the executive-owner of the network who wants to pander to the Tea Party admirably holds down that end.  I wonder where she got her inspiration for the role?

Networks like ratings which makes it hard to explain why the network hired Mackenzie McHale, played by Emily Mortimer, to produce the news.  She supplies part of the cocoon around McAvoy so that he can do his stuff even though she once broke his heart.  For this indiscretion, Mortimer’s McHale is serving time in her own private purgatory and is visited there by McAvoy who sometimes plays the role of resident devil torturing her.  If it sounds confusing it is not.  It simply accentuates the many skills of creator and primary writer Sorkin.

So, by my count, there are at least three shows that borrow liberally form the Faust cannon to weave very different stories about contemporary American life.  What do we make of this?  Is it simply coincidence?  Are all the writers and producers simply mining a rich vein?  If they are just mining the question remains.  Why are they all mining this vein at this particular time?  Is it midnight in the American Cinderella story too?  September 11, 2011 is too far removed from today to suggest it has an impact here.  But it does seem like something became badly unhinged at some point in the not too distant past in this mythical America portrayed on cable.

I think it’s not 9/11 though.  It would be too cliché for all these shows to somehow reflect back to those events.  I think these shows all, in one way or another, try to answer the question, what do you do when you have everything?  Everything is at the heart of Faust and in some iterations, the character discovers everything isn’t enough while in others everything eludes him like the green light at the end of Daisy Buchannan’s dock.  In a sense they are generational shows reflecting back at baby boomers the choices they’ve made over the last few decades as the richest, most well educated but also most spoiled generation in the history of the planet.

Any way you slice it, the main characters are middle aged strivers who, like Norman Mailer, once reached the top of the mountain huffing and puffing only to ask, Is that it?  There’s never been a satisfactory answer to that one.  Maybe that’s all there is here.  Three shows that explore what it’s like to reach the top with gas left in the tank, all dressed up but with nowhere else to go.  Come to think of it, each incorporates Sisyphus too because they keep coming back anyhow.  It’s a golden treadmill and a sobering thought.  Faust may not be pretty to contemplate but these shows are entertaining as hell.

The headline in the New York Times brought what I had thought would be unambiguous good news or at the very least non-news to most people.  A San Jose jury had found in favor of Apple in a patent infringement case against Samsung and awarded Apple one billion dollars in compensation.  The suit involved infringement on patents for the iPhone and iPad.

But of course there was diverse opinion over the verdict.  Much of the commentary in the Times was of this variety:

“This is an overreach of the patent law. If the first carmaker (Daimler) would have patented this new type of vehicle, there might never have been an American (sic) car industry. Apple ends up looking bad in the end, since it’s obvious that they are trying to stifle a competitor that is starting to get better at doing something Apple did first.

But I disagree.  In that vein, did you know that the Wright Brothers patented the airplane?  It’s U.S. patent No. 821,393 in case you are curious.  You can look it up.  That patent didn’t seem to slow down the evolution of the aviation industry.

I don’t usually comment on stuff like this but I feel compelled to because what passes for logic in this case is terrible.  Much of the commentary is a misguided attempt the re-examine the patent process.  The commentators disagree about whether this or that feature should be patented or patentable but that train left Dodge a long time before trial.  They also engage in retrograde thinking, by essentially saying that the patent is obvious today so why was it needed in the first place?  But the ideas that go into patents are rarely obvious at the time of invention and patents are awarded to protect an innovation by giving its authors time to profit from their invention.  Without patents would we still bother to invest billions in R&D not to mention the time and effort to invent things?

The patents were awarded fair and square regardless of what anyone thinks now. The only question before the court was whether or not Samsung illegally copied a feature or function for which Apple had won a patent. The answer was a resounding yes. Yes, Samsung deliberately and knowingly broke the law by using someone else’s property without paying for it.

The issue was never about how deserving Apple or anyone else is or was of receiving a patent.  It wasn’t even about Apple using its great wealth to prosecute an even wealthier corporation.

When did we as a people become so illogical?

Larry Ellison recently bought 98% of Lanai, a small Hawaiian island off Maui.

No, I am not making this up.  If I could write fiction like that I wouldn’t be in this business.  Or maybe I would but I’d be better paid.

At any rate, the article in the New York Times says Lanai has one gas station, no stop lights and two Four Seasons resorts with serious golf courses.  It is formerly the largest pineapple plantation in the world (88,000 acres) and home to 3,125 people.

The previous owner had proposed building a 45-acre field of wind turbines to generate electricity that could then be sold to Maui.  No word yet on whether Ellison plans to continue with the windmill plan.  As in other parts of the world, the population of the island is divided into two camps — those who detest windmills and those who crave electricity.

Actually the two groups overlap quite a bit and this is where things get confusing for me.  If you own 98% of the island, doesn’t that make you the feudal lord?  And can’t you do pretty much what you want with the land short of opening a hazmat dump? Also, what’s the difference between a user group meeting and just living on the island?  I’m not sure how this plays out so it will be interesting to watch.

There’s been no public announcement in the six weeks since Ellison bought the island so no one, even the islanders has an idea of what the future holds.  With two Four Seasons resorts there is some speculation that the island could become some kind of hub for sailing.  Perhaps a training center for America’s Cup competitors?  I am sure all the confusion will be cleared up at OpenWorld.

What’s the world coming to?  Microsoft lost money in the software business last quarter, the first loss in a decades long string of positive earnings from the world’s biggest software company.  Sheesh!  Yes, there were extenuating circumstances that you can read about here, but the loss signals the breadth and depth of the impact that the tablet is having on the hardware market.  The iPad tablet to be precise and its economy size, iOS sharing little brother, the iPhone.  For a quick slide show on iPad’s penetration and adoption check out this presentation from Business Insider.

Last time I asked if hardware was becoming sexy again and why.  The answers seem to be “Yes” and “Because tablets have reached a new price point that opens up more emerging global markets to computing.” Tablets and their near kin, smartphones, are defining a global computing platformfor the next decade and beyond promising first world information access to many people formerly left in the dust.

The writing was already on the wall when analyst firms IDC and Gartner recently documented a stall in the PC/laptop forward momentum.  Lower PC sales means fewer operating system sales and all that goes with it.  To be sure, tens of millions of units are still being sold this year along with operating systems and productivity software often bundled in.  But growth has stalled as new customers in emerging markets are voting to type on Gorilla Glass over keyboards.

Every paradigm goes through a predictable lifecycle and the computer operating system dependent on hardware sales is another example, not an exception.  Microsoft, Intel and others invested heavily in thin, ultra-light laptop machines as the next thing that would protect the franchise and compete with tablets, but they were still too expensive and ultimately not cool enough.  If Microsoft expects to get its OS mojo back it will need to cajole its hardware partners into really being competitive with tablets.

Right now, everything is going the way of the tablet and Apple can almost do no wrong.  Even when a European judge made a finding in favor of Samsung in a patent dispute with Apple recently, he declared the Samsung gear “not as cool” as Apple’s and therefore not infringing on Apple patents.  That’s just amazing.

Windows 8 comes out later this year and Microsoft has introduced a tablet of its own, the Surface.  The game is far form over but the latest brush with reality suggests Microsoft might have been prescient in going “all in” as Steve Ballmer said of the company’s approach to cloud computing some time ago.  Microsoft is at some intermediate point in its journey from vendor of licensed software to ringmaster of a giant subscription economy.  Like many companies in similar transitions, the going isn’t always smooth but if anyone can pull this off it ought to be the guys in Redmond.

When I’ve spent time with the Redmond gang over the last couple of years I’ve been impressed with how much they get it, not just at a high level but throughout the organization.  All in, Azure, and retail stores suggest a company thinking its way through the changes.  And analytics and social networks suggest they really get it.  Maybe all in should be replaced by we get it or better, we get you, but not quite yet.

But on a cautionary note getting to the cloud or to tablets won’t be enough; this is a business model change that every company has to deal with and Microsoft has done more than many already.  Now, Microsoft’s partners have to pick up the gauntlet and evangelize more than ever.

This week (on July 25) Zuora will release a Fireside Chat video discussion that I am participating in.  It will be all about the cloud and subscriptions and I expect an important theme will be the attention that subscription companies need to pay not to selling but to service and ensuring customer happiness.  And, oh, heck, while I am talking about myself I might as well mention that my new book is coming out around the same time — “The Subscription Economy — How Subscriptions Improve Business.”

While the changes in the industry might be painful for some, they also represent innovation and creative destruction which is the hallmark of a vibrant economy.  The issue for us is not how to slow down change but how to embrace and leverage it.  Once the election clears out I think Q4 could be an important turning point as winners and losers get back to the work of inventing the future and making money.


A few years ago, Harvard Business School professor, John Quelch penned a post in which he invented the term, “middle aged simplifier” which is a person of middle age in the process of breaking down the household that raised and launched children.  This simplifier was, according to Quelch, mostly female and mostly interested in acquiring services and experiences of all types, rather than buying more products.

Quelch’s metaphor is of selling the house in the ‘burbs and migrating to a city for its cultural attractions, restaurants and quality of life that does not include mowing the lawn or renovating the kitchen.  Now a new study from sociologists at UCLA documents the pathology behind the catharsis of simplifying.

Researchers from UCLA’s Center for/on Everyday Lives of Families (CELF) studied 32 families and their possessions and wrote “Life at Home in the Twenty-First Century: 32 Families Open Their Doors,” complete with pictures of over stuffed rooms and the obligatory garage that no longer accommodates a car.  The research team included archaeologists, anthropologists and other social scientists.

Among their findings which I am quoting from UCLA Newsroom:

  • Managing the volume of possessions was such a crushing problem in many homes that it actually elevated levels of stress hormones for mothers.
  • Only 25 percent of garages could be used to store cars because they were so packed with stuff.
  • The rise of big-box stores such as Costco and Sam’s Club has increased the tendency to stockpile food and cleaning supplies, making clutter that much harder to contain.
  • The addition of costly “master suites” for parents proved the most common renovation in the homes that were studied, yet the spaces were hardly used.
  • Consistent and troublesome bottlenecks emerged in the homes, yet families rarely devoted renovation dollars to remedying these obvious problems.
  • Even in a region with clement year-round weather, the families hardly used their yards, and this was the case even among those who had invested in outdoor improvements and furnishings.
  • Most of the families relied heavily on convenience foods like frozen meals and par-baked bread, yet they saved an average of only 10 to 12 minutes per meal in doing so.
  • Fragmented dinners — those in which family members eat sequentially or in different rooms — threaten to undermine a sacrosanct American tradition: the family dinner.

So what’s the CRM angle on all this?  In the interest of brevity, I thought I would bullet some ideas.

  • Clearly, with or without CRM, consumer society has reached a zenith and the limit to acquisition of even more stuff may just be the lack of space to store it.  The joke about expanding to fill the available space is coming home to roost (if it can find a toehold).
  • As an economic reality, if current households are literally full AND new household formation is below what would normally be forecasted AND wages are stagnant AND the consumer makes up two-thirds of consumption in America, it is hard to see how growth resumes.
  • I think you need to tease apart the ideas of hanging onto children’s toys and clothes for the “grand kids” from getting a deal on paper towels at Sam’s or Costco.  At least the towels get used up; the toys are waiting for toy Godot.
  • Our eating habits drive the obesity epidemic.

No wonder the simplifiers were documented by Quelch; they were the leading edge of the wave.  But they were coming out just as the recession hit and now with house prices depressed the whole process might be in semi-permanent arrest.  People with big suburban homes have found it hard to get their price, which backs up the process of deleveraging the garage, which might add to the stress.

What to do?

Regardless of one’s ability to move house, with fewer spaces to park additional acquisitions, it would make sense that more vendors will focus on services and experiences.  Hence the software, especially the social software that helps us discover attitude and sentiment.

Perhaps there is a silver lining and some future entrepreneurs will make money by returning usable square footage to the homestead (clutter busters?).  People armed with a dumpster and trained in the hard science of evaluating and tossing the unwanted and the exhausted or broken might become the new go-to professionals.  I can just hear Steely Dan singing “Kid Charlemagne” — “…just get it all outta here…”

Jeff Foxworthy made many jokes and dollars defining rednecks as people with aging and non-running cars in the front yard. Turns out they were not unusual among humankind; they simply had bigger yards. There is a suburban equivalent and they need a name.  Please help!