From Evernote:

StratVantage Consulting, LLC — The News – 08/06/01 Clipped from: http://www.stratvantage.com/news/080601.htm

The News – 08/06/01

The Cashless Society and Your Privacy

The recent SNS article, Wireless and Cashless , provoked a response from Alert SNS Reader John Skach. During an email exchange, we debated whether the dual technologies of wireless position-sensing (the ability to find you by tracking your cell phone) and cashless transactions (the ability to track your purchase behavior) represent a slippery slope toward Big Brother-ism. I expressed the opinion that I almost preferred the government knowing more about me than corporations, because there’s at least some possibility of controlling what the government does with the information. John begged to differ. The following is an edited version of his response, which brings up some of the issues around our use of these new technologies.

For the commercial side – no I don’t mind. There are strong market forces at work there. First time they screw up and expose me to something insidious, they’re toast and they know it. Despite all the hoopla surrounding online credit card transactions, more fraud occurs from retail personnel lifting numbers and names during physical activity than any bad stuff on the web. Something funny actually happened when someone pointed out that little fact to the credit card agencies: Suddenly the carbons disappeared – almost overnight.

On the other hand . . .

When my ex-wife went thru five years of hell with breast cancer, we didn’t get the genetic test done for a reason. Given her heritage (Ashkenazi Jew), there is a 75% chance she would have tested positive on the BRCA 1 and BRCA 2 [breast cancer gene] tests. However, since we had no idea what that information may do to our daughter’s future insurance eligibility – we didn’t get the test done. Hell, we already knew my ex-wife had cancer. That family history alone at some point in my daughter’s life will give her problems with insurance companies.

The government – now that’s a whole other story. Twenty-dollar bills are popular for a reason. There are pros and cons to all information trading. Gee if I could get rid of my yearly nightmare of tax filing by sharing a tad more information (what exactly remains to be seen), I would most certainly allow that information to be gathered.

Amex is probably on the right track with the one-time credit card numbers but I’m not sure where that goes.

Each day we make little decisions about how much of our privacy to release and how much to hold back. There is a constant trade off of effort and convenience. The price we pay more and more is that little bit of privacy. How do we stay connected and keep it? Use garbage email accounts like Yahoo Mail or Hotmail, or anonymous IP address providers. How much do you want to spend versus what you get? [I particularly like this point. We should all put a value on our personal information and consider giving it up as a form of spending that we watch as closely as any other spending.]

Don’t know that this is all that new a thing actually. The woman I am dating is from a small town outside Peoria. Everyone, and I mean EVERYONE, just knows that she is dating a drug dealer from Chicago who drives a BMW instead of a mild-mannered software engineer with great taste in cars. <wink, wink> How much privacy is there really in a small town where everyone knows everyone’s business anyway? Metropolitan life offered privacy simply through the ability to lose oneself in a crowd. Nowadays though, one of the script kiddies’ favorite things to do is to bang on your next door neighbor’s IP address on the shared broadband connection and see just exactly what is on their hard drive. I used to watch all the attempts on my firewall when I was connected via cable instead of DSL. Was kind of funny. The moral equivalent of school kids peeking in windows to see if it’s true about what they heard about the young school teacher’s evening entertainment.

This reminds me of a similar point about window peeping, made in John Keller’s rant, Big Brother :

The socialist’s dream of constant observation as a means of people control is arriving, albeit 17 years behind Orwellian schedule. Like Will Smith, in “Enemy of the State,” the g-men know where we are, and what we are doing at all times. Well, not at all times, just when we’re in “public”. So far Tampa and Virginia Beach are the only two cities stupid enough to announce what they’re actually doing. No doubt some cities with “traffic cameras” propped up all over the place have designs or have already linked similar software to track specific vehicle or personal movements from camera to camera. All to more safely design highways, and understand traffic patterns, you see. We’re Government, and we want to serve you, our customer! [For a more insidious potential threat, there’s a company building video capabilities into highway lane reflectors. I profiled them in my speech, The Next Wireless Killer Apps: Will You Have to Have It? ]

Finally, people are starting to wake up. The apologists’ argument for this system usually goes along the lines of “If you haven’t done anything wrong, you don’t have any reason to object to it.” Sure. Why don’t we let stalkers and Peeping Toms use the same argument in court? Because it’s an invasion of privacy. The folks in the streets, the ones who know Soviet-style thought control when they see it, understand that this changes the dynamic completely. You aren’t considered innocent until proven guilty under this system. You have no right to privacy, not in public at least, and the government is a master of making the steepest slippery slope arguments look prophetic in hindsight.

A pet peeve of mine is the response I often get when I bring up privacy concerns: “Well, I don’t do anything illegal, so I don’t really care.” What you do is not illegal yet. And I’m sure you never, ever, exceed the speed limit, or take too many items into the express checkout lane at the supermarket. Anyway, John Skach wraps up:

I’m not saying that the loss of privacy is good, merely observing that once again the pendulum swings.

Unfortunately, the pendulum could stay swung, especially if Microsoft’s HailStorm service takes over authentication and user information validation services on the Internet. The service is based on Microsoft’s Passport service, which, by the way, you have to sign up for if you want technical support from the software monopoly. Passport stores information about users—ranging from their address to their credit card numbers to their favorite Web sites—on server farms operated by Microsoft.

So what’s the big deal? Microsoft plans to charge you for access to your own information, that’s what. According to Summit Strategies, “It expects to charge an as-yet-undetermined subscription fee to HailStorm customers and also to charge some usage-based fees—for example, fees for customers that require more than a base-level storage capacity for their Web-based data and documents.” That’s some catch, that Catch-22 . Other problems with the proposed service include the vulnerability of a single location that stores important information to not only typical Web site glitches, but also to hackers.

Regardless of how serious you think the question of privacy is, or how likely a Big Brother scenario is, businesses need to decide for themselves how much personal information to require of customers, and what the permissible uses of this information are. On the flip side, what kinds of information are being gathered about you, and how is it being used? If your business doesn’t have a privacy policy , you should get one. And if you don’t know what your doctor’s or hospital’s information-sharing policies are, I suggest you find out before information you’d rather remain private escapes.

TechRepublic

Briefly Noted

• Shameless Self-Promotion Dept. Correction: I’ll be speaking at the Minnesota Entrepreneurs Club pre-meeting workshop at 5:30 p.m. on Tuesday, August 14th in St. Paul, MN, not the 7th as previously announced. The meeting is at the Minnesota Business Academy . My topic is “Will You Have to Have It? What You Need to Know About Future Tech and Your Business.”
  MN Entrepreneurs

• Metricom Out of Business: Success has many fathers; failure has many analysts. Ricochet sounded like such a good idea: Offer 128Kbps wireless Internet access in major metropolitan areas. That’s more than twice the speed of dialup modems. Who wouldn’t want it? Well, lots of folks, it turns out. They stayed away in droves, and now Metricom, after filing Chapter 11 only a month ago, is quitting business. The analysts are in a feeding frenzy, trying to determine how a can’t miss proposition went south. Some blame the price, $70/month. Some blame the positioning: It probably wasn’t smart to target consumers rather than businesspeople. Whatever the reason, some lucky company can receive a potential windfall as the entire Ricochet wireless network, which consists of 17 wired cities, the company’s patents, its spectrum and its subscribers, goes up for auction August 16th.
  The Standard

Return to Mike’s Take

From Evernote:

StratVantage Consulting, LLC — Mike’s Take on the News 08/03/01 Clipped from: http://www.stratvantage.com/news/080301.htm

The News – 08/03/01

Attack of the Blogdex!

MIT’s Media Lab has released Blogdex , and index of, what else, blogs. Blogs are random musings published by those who think the world will care, like me . Basically, blogs make it easy to publish Web pages to any site you have FTP access to. The idea behind Blogdex is that most blogs have hyperlinks in them, and thus blog authors represent a good sampling of what people are interested in on the Net. Blogdex visits 9,000 blogs a day, and extracts the links. It then ranks the links by popularity.

The service is still getting off the ground. The number one link on today’s Blogdex was mentioned in only eight blogs. Number two is pseudonymous commentator Robert X. Cringely’s article on TCP/IP. The number 10 link was www.iwantanewgirlfriend.com , which is itself a blog, and which is sponsored by a sex toy I’ve never heard of: the world’s only oral vibrator, Tongue Joy. Others on the list concern the 20th anniversary of the PC, the fatness of Americans, and the poor guy who got nailed, literally, in the eye.

It’s pretty easy, at this point, to manipulate rankings based on such a small sample. Since Blogdex users can link back to the original blogs, being on the list means your blog can be exposed to more people. In a shameless display of oneupsmanship, I’ve added the top 10 sites to my Stratlets blog. Let’s see if I end up on the list. BTW, as yet another lesson of how important it is to have your own important business marks turned into domains, www.blogdex.com is not registered to MIT, but to an enterprising entrepreneur hoping to make a buck.

I’m having a hard time seeing this as representative of where ordinary mortals are going on the Web. A far better pulse can be gotten at Google’s Zeitgeist , which is a ranking of the most popular search terms on one of the Web’s busiest search engines. Here’s today’s top ten with my glosses:

1. sircam SirCam is an Internet worm that is actively spreading. 2. max payne Max Payne is a popular video game. 3. planet of the apes Popular movie 4. code red virus Obnoxious computer virus 5. howard stern Apparently there was a fist fight on Howard Stern’s radio program recently. 6. george harrison There have been a lot of rumors and counter rumors about Beatle George Harrison’s health. 7. etna Mt. Etna is erupting 8. heather mills Heather Mills is hot and engaged to Sir Paul the Cute One. 9. israel Who knows? 10. rivaldo Brazilian soccer midfielder

Now this is more like it: more sex, some rock and roll, some mayhem, and something for the geeks.

Those wanting a second opinion can check Lycos’ Top 50 , which includes with each listing an explanation of why they’re popular. Whichever list you look at, it behooves business people to realize that the Internet has become a mass market phenomenon, and there’s all kinds of people using it for non-business uses. No matter how popular your business site is, it’s not likely to appear in one of these lists.
Blogdex

Briefly Noted

• Shameless Self-Promotion Dept.: I’ll be speaking at the Minnesota Entrepreneurs Club pre-meeting workshop at 5:30 p.m. on Tuesday, August 7th in St. Paul, MN. The meeting is at the Minnesota Business Academy . My topic is "Will You Have to Have It? What You Need to Know About Future Tech and Your Business."
  MN Entrepreneurs
• Sunrise Period for .info Domain: From now until August 27th, registered US and EU trademark owners can register their .info domains. BulkRegister is charging a registration fee for $5 per name, with a discount for volume. Registrations must be for a minimum of 5 years. Like all registrars, BulkRegister does not guarantee that the trademark owner will actually get the domain name. But there’s a better chance now than in the next phase, called Landrush, when names will go to any registrant. I have no idea how trademark ownership will be determined during the Sunrise phase. I’d be very surprised if the process can be completed by the deadline.
  BulkRegister.com
• Open Services Coming? Gene Kan, ex-Gnutella, ex-InfraSearch, current JXTASearch leader, writes about an evolving technology trend akin to Open Source, which brought us most of the tools that the Internet runs on. An outgrowth of the peer-to-peer (P2P) movement, Open Services involve the sharing of idle resources, which, due to Moore’s Law , have become extremely abundant. As Kan puts it:

The price of performance is decreasing constantly while the performance itself is increasing ridiculously. That means I’m pretty happy to share my Pentium 8 50gHz with you because I only need all that horsepower while Windows boots. After that, the CPU is hardly utilized because I can’t hit 50 billion keys in a second. Between keys, my computer could be cracking RC5 or musing on colon cancer.

Nice dig at Microsoft there, BTW. Anyway, what Kan and others are proposing is a codified way to share your computing resources a la current P2P schemes like SETI@Home , Parabon, AllCast , and Envive .
OpenP2P

Can’t Get Enough of ME?

In the unlikely event that you want more of my opinions, I’ve started a Weblog. It’s the fashionable thing for pundits to do, and I’m doing it too. A Weblog is a datestamped collection of somewhat random thoughts and ideas assembled on a Web page. If you’d like to subject the world to your thoughts, as I do, you can create your own Weblog. You need to have a Web site that allows you FTP access, and the free software from www.blogger.com . This allows you to right click on a Web page and append your pithy thoughts to your Weblog.

I’ve dubbed my Weblog entries “Stratlets”, and they are available at www.stratvantage.com/stratlets/ . Let me know what you think. Also check out the TrendSpot for ranking of the latest emerging trends.

Return to Mike’s Take

From Evernote:

StratVantage Consulting, LLC — Mike’s Take on the News 08/01/01 Clipped from: http://www.stratvantage.com/news/080101.htm

The News – 08/01/01

Online Advertising = Online Branding

A new study by Jupiter Media Metrix estimates that the Return On Investment (ROI) from online advertising may be 25 to 35 percent higher than most advertisers believe. The reason for this is that most marketers don’t measure the branding effects of online advertising. This is a point I have stressed in the past with my clients: Even if the ad campaign doesn’t drive huge volumes of customers to buy your product, there is a halo effect of making prospects aware of your brand, and in the development of that brand’s equity. Very few marketers (15 percent) conduct formal online branding measurement, probably because it’s harder to do than tracking direct response metrics, including click-rate (60 percent) and cost per conversion (75 percent).

Part of the problem in measuring online advertising’s effect on branding is that online is still a secondary factor in most companies’ brand development, said Jupiter. In fact, online advertising only delivers 17 percent of the traffic to a Web site, with the rest coming from search engines, word of mouth, or other advertising and branding efforts.

It doesn’t look to get any easier for marketers to measure online advertising effects due to the fractured reach of most major sites. Jupiter points out that Yahoo, one of the best ad vehicles on the Net, splits traffic among 438 separate domains, making it hard to track advertising.

All this means that if you’re only measuring click through rates, you’re really not understanding all that online advertising is doing for your business.

Asia.Internet.Com

Briefly Noted

• Shameless Self-Promotion Dept.: News Flash: Shoemaker’s Children Get New Shoes. You’ll notice I’ve added a search capability to the StratVantage Web site, courtesy of Atomz. Atomz makes a pretty full-featured search engine available to small potatoes sites like this one for free. The lateness of this addition is ironic because for years I’ve insisted that you don’t have a Web site unless you have a search capability. I even wrote a book chapter on the subject. Well, do as I say, doggonit, not as I do! Anyway Atomz is a pretty cool product. The search engine code stays on their server and they spider your site once a week and maintain the index for you. If you have more than 500 pages, you’ve got to pay. Brevity is the soul of wit.
  StratVantage
• Nokia Readies 850MHz GSM Phone: For a while I’ve been scratching my head and wondering how cell phone network giant ATT Wireless was planning to introduce GSM in the US. GSM is the cell phone standard used by more than 550 million subscribers in more than 170 countries outside North and South America. ATT’s network is based on the TDMA standard, which, although related to GSM, is not compatible. Turns out Nokia is working on GSM cell phones that work on the 850MHz spectrum that ATT’s TDMA phones use. The cell phone maker claims this technology will allow TDMA carriers to transition to GSM, and from there to the higher speed GPRS, EDGE, and eventually WCDMA standards. If you’re confused by the acronyms, think, fast, faster, fastest wireless data access. I understand the evolution from GSM to GPRS to EDGE, as they are all related technologies. But I just don’t get how GSM-based networks are going to convert to WCDMA, an evolution of the totally incompatible CDMA standard. Bottom line: all kinds of good things are forecast for ATT’s network, especially considering ATT is also planning on introducing Japan’s i-mode standard by year end. If you’re not confused about wireless, you’re not paying attention.
  Nokia
• OK, I Gotta Mention Code Red: In case you haven’t heard the breathless media alerts, the Code Red Internet worm (a kind of virus) has relatively easily infected hundreds of thousands of Microsoft Web servers and is poised to take action today. I’m wondering why anyone would use Microsoft’s Internet Information Server on the Internet. When’s the last time you heard of the Apache Web server being hacked and hundreds of thousands of Sun sites infected with a virus? Yet these two pieces of technology run the bulk of the Web, vastly outnumbering Windows-based Web sites. Windows has its place. It’s not on the Internet. Of course, that’s just my opinion, and I could be wrong. You know, I thought I was wrong once in 1987, but I was mistaken. Ö¿ð
  C|Net
• Not Another Microsoft Story! OK, I tried to resist. I really did. Honest. But this wonderful quote from Microsoft spokesperson Vivek Varma regarding AOL’s inking of an exclusive deal to feature their online service on Compaq computers is just priceless: “(AOL) is paying PC makers to eliminate consumer choice.” To which AOL spokesperson John Buckley retorted, “It’s called competition.” Glad he pointed that out, as Microsoft may not be familiar with the term. You may remember that Microsoft used to charge PC makers for Windows even if they preinstalled a competitive operating system.
  USA Today

Can’t Get Enough of ME?

In the unlikely event that you want more of my opinions, I’ve started a Weblog. It’s the fashionable thing for pundits to do, and I’m doing it too. A Weblog is a datestamped collection of somewhat random thoughts and ideas assembled on a Web page. If you’d like to subject the world to your thoughts, as I do, you can create your own Weblog. You need to have a Web site that allows you FTP access, and the free software from www.blogger.com . This allows you to right click on a Web page and append your pithy thoughts to your Weblog.

I’ve dubbed my Weblog entries “Stratlets”, and they are available at www.stratvantage.com/stratlets/ . Let me know what you think. Also check out the TrendSpot for ranking of the latest emerging trends.

Return to Mike’s Take

From Evernote:

StratVantage Consulting, LLC — Mike’s Take on the News 07/30/01 Clipped from: http://www.stratvantage.com/news/073001.htm

The News – 07/30/01

B2B Pace Car

Covisint landed on the B2B exchange scene last year with a thud, simultaneously legitimizing and terrorizing the exchange marketplace. After spending most of last year getting their act together, the automotive marketplace is now doing $36 billion in transactions via auctions. There’s no telling how much revenue the independent company is reaping from those transactions because Covisint (stupid name alert) isn’t saying.

Lately it seems they’ve been having trouble signing up European automotive suppliers, but partner DaimlerChrysler should be able to bring them in line. Covisint claims automakers can save $2,000 to $3,000 on producing a car and take 6 to 8 months out of the product cycle.

Doug VanDagens, Covisint’s senior vice president of strategy and business development, said “At the end of the day, private and public exchanges want the same thing: they all want to be profitable and save money for their customers at the same time. Ownership is the only real difference.” I beg to differ. The aims of captive exchanges like Covisint are fundamentally different from the aims of either public or private exchanges. There’s more detail in the white paper, Taking Control of the B2B Exchange: What’s Next in the Supply Chain Evolution , but essentially the goals of the three types of marketplaces are:

· Captive Exchange (AKA COBAM – Collaborative Online Bricks And Mortar) – to ensure lower prices and continued industry dominance for the sponsors. Price pressure is applied through liquidity, the volume of transactions over the exchange. Partners commit to a certain transaction volume, and encourage or require their trading partners to participate. COBAMs are slowly realizing that true value can be created through collaboration with suppliers, not through beating them up over price.

· Independent Exchange (AKA Public Exchange) – to create liquidity that drives transaction fees and other revenue streams. A marketplace that is not liquid does not have a lot of trading activity. Without critical mass, independent exchanges cannot derive revenue, regardless of whether they charge transaction fees or depend on providing ancillary services to make ends meet.

· Private Exchange (AKA Extranets on Steroids) – to improve communications and increase collaboration with supply chain partners. Private Exchanges are controlled by a single buyer, and are typically not about liquidity, although a critical mass of transactions is necessary to justify their existence. The buyer and the suppliers can design new products or logistical flows, and all can benefit from greater visibility into what’s happening in the supply chain. The private exchange is more about creating lower costs through decreasing supply chain friction rather than through increasing competition.

Business owners should be aware of the goals of the various types of exchanges before agreeing to participate. If those goals are not aligned with the business’, take a hard look at participation. It seems that the COBAMs have the momentum and the transaction volume in the industry today, but private exchanges and the collaborative tools they make available will be the dominant form of online marketplace by the end of the decade.
eBizChronicle

Briefly Noted

• Do Online Ads Work? A famous man once said, “I know that half the money I spend on advertising is wasted. I just don’t know which half.” You’d think online advertising, with its ability to track response, would improve that ratio. Apparently not, but there are some things we’re learning about online advertising. For example, a DoubleClick study found that larger banner ads work better. Also more effective were those incredibly annoying “interstitial” or “pop under” ads. Those are the irritating windows that pop up when you enter or leave a site. A great example is the ubiquitous ads for the wireless video camera you’ve no doubt seen. Those have become so obnoxious, that you can actually go to the manufacturer’s site and sign up not to see the ads. It only works for a month, and then they’re back in your face. Anyway, this eMarketer article pleads with advertisers to not start an arms race:

  Rather than lurching towards "bigger is better" online advertising, in an understandable attempt to provide both comfort and confidence to traditional advertisers, perhaps the industry should seek ways to work with consumers. After all, this is still a very young medium. Surely we haven’t run out of ideas already.

  Amen to that.
  eMarketer

• European Online Grocers: Several grocery dot-coms have blown up recently, yet two European firms are charging ahead with online grocery. As reported here earlier, multinational grocery Ahold has made eCommerce and home deliveries a major strategy, buying the rest of Peapod and running a very nice online operation in Argentina . In 2000, it achieved online sales of about 250 million euro and expects sales to rise to about 1 billion euro by 2002. After shelving GroceryWorks.com and writing off $30 million, multinational grocer Safeway transferred 35 percent of GroceryWorks equity to Tesco PLC, a British grocer. Tesco runs a profitable $420 million online operation in the United Kingdom and intends to allow users to shop via Microsoft Pocket PC devices. In return for the equity, Tesco is helping to revamp Safeway’s online operations. The operations will reopen under the local Safeway banner with a new Web site and deliveries fulfilled from the stores. Now that’s the way you do it.
  IDC eBusiness Trends

• Demise of a Newsletter: Jeffrey Harrow, the author of one of my favorite online newsletters, the Rapidly Changing Face of Computing, published by Compaq, is leaving the company. RCFoC has a little larger circulation than SNS, about half a million readers. There’s no telling what will happen to this tremendous resource about leading edge tech, but chances are good something will occur at www.rcfoc.com .
• Web Site Outage: Although it didn’t make the national news, the StratVantage Web site was inaccessible for many hours last Thursday, right after the previous SNS went out. I apologize for the inconvenience and blame

  the nitwits at my hosting company, who decided to change all the IP addresses in the middle of the day. When I pressed them as to why they hadn’t notified me beforehand, they said, “We have thousands of users. We couldn’t possibly call them all up.” I asked them if they had ever heard of email. They said they usually post notices of this sort on their helpdesk Web site, although they had neglected to do so this time. This reminded me of the bit in Hitchhikers Guide to the Galaxy where poor Arthur Dent is told the notice of his impending house demolition had been on display at the local planning office for nine months. Dent eventually found the notice: “It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard .’”

• Content-Free Websites: Noted Web usability expert Jakob Nielsen recently wrote about Web site tag lines, the short statements that sum up what a site offers. He has found that B2B sites have a tough time putting what they’re about into short, pithy statements. He offers some guidelines for front page design (among them, lose the Flash animations):

  Users decide quickly whether to stay or leave a site. To assess whether your homepage communicates effectively to visitors in the crucial first 10 seconds, follow two simple guidelines.

1. First, collect the taglines from your own site and your three strongest competitors. Print them in a bulleted list without identifying the company names. Ask yourself whether you can tell which company does what. More important, ask a handful of people outside your company the same question.
2. Second, look at how you present the company in the main copy on the home page. Rewrite the text to say exactly the opposite. Would any company ever say that? If not, you’re not saying much with your copy, either.

Think about your home page as analogous to a tradeshow booth. Why do you stop at some booths and skip others? And, no: having a live magician is not the answer for your home page. Clearly saying what you do and why users should care is the way to go.

Useit.com

• Gimme a Cold (Bud) Light: When I saw a reference to this article the first time, I thought, “It’s too incredible to be true.” When I saw it again, I finally had to read it. It is too incredible to be true: Physicists have found a way to stop light. Not the red kind on the corner, they actually have slowed light down to a stop. A research team at Rowland Institute for Science in Cambridge, Mass., first succeeded in slowing light in March 1998. By July of that year, they got it down to less than the speed of sound. Late last year, they brought pulses of light to a complete halt within tiny gas clouds cooled to near absolute zero. They kept light on ice, essentially translating it into motionless forms of quantum information. Of course, it’s no trick to slow down light. We couldn’t see anything if the lenses in our eyes didn’t slow light down to focus it on our retinas. But stopping it is pretty drastic. It required a cloud of sodium atoms trapped in a magnetic field and cooled to within a millionth of a degree of absolute zero. That’s pretty cool. The researchers say this technique could be the key to creating quantum computers with unimaginable power. Now if the answer to life, the universe and everything turns out to be 42 . . .
  Scientific American
• Wireless LANs Unsafe: If you’re thinking, as I am, about getting a wireless network card for your laptop (I want mine so I can work on the porch), you might want to think again. Turns out it’s quite easy to hack the data stream running over the most popular wireless LAN protocol, 802.11b. Guardent Inc., an Internet security firm in Waltham, Mass., routinely pulls data out of the air while testing clients’ security. The problem is that most companies using wireless networks neglect to turn on the security built into the systems. But even that security is inadequate, according to posters on the Zealots mailing list. Called Wireless Encryption Protocol (WEP), the scheme is easily defeated just by simply listening to the traffic stream. “After scanning several hundred thousand packets, the attacker can completely recover the secret key and thus decrypt all the ciphertexts,” says Adi Shamir of the Weizmann Institute of Science. So if you’re considering a wireless LAN, be sure to add some other, more secure, encryption software to your setup or you could be sorry.
  StarTribune
  Zealots Mailing List Thanks to Alert SNS Reader David Dabbs for the ping.

Can’t Get Enough of ME?

In the unlikely event that you want more of my opinions, I’ve started a Weblog. It’s the fashionable thing for pundits to do, and I’m doing it too. A Weblog is a datestamped collection of somewhat random thoughts and ideas assembled on a Web page. If you’d like to subject the world to your thoughts, as I do, you can create your own Weblog. You need to have a Web site that allows you FTP access, and the free software from www.blogger.com . This allows you to right click on a Web page and append your pithy thoughts to your Weblog.

I’ve dubbed my Weblog entries “Stratlets”, and they are available at www.stratvantage.com/stratlets/ . Let me know what you think. Also check out the TrendSpot for ranking of the latest emerging trends.

Return to Mike’s Take

From Evernote:

StratVantage Consulting, LLC — Mike’s Take on the News 07/26/01 Clipped from: http://www.stratvantage.com/news/072601.htm

The News – 07/26/01

Wireless and Cashless

Well, it’s been a long time coming to this country, but Nokia, 2Scoot (stupid name alert) and Sodexho have debuted wireless, cashless payments at Nokia’s Irving, TX campus cafeteria. The scheme uses Radio Frequency Identification (RFID), which I’ve been yammering about in the TrendSpot for some time. You know those decorated cell phone faceplates you can get? Nokia’s got a new model called a SmartCover, which incorporates a 2Scoot RFID tag. The SmartCover identifies the user to the 2Scoot backend system and links to a customer’s existing credit card, authorizing and clearing payment in less than a second.

A nice trick, but let me know when you’ve got the system Bluetooth-enabled. While this is a good first step toward a mobile cash solution, it requires quite a lot of setup to work. The vendor needs to implement 2Scoot’s hardware and software systems. Customers need to purchase SmartCovers and install them on their phones. Plus, the phones need to be Nokia phones and despite the fact that Nokia is the number one cell phone maker, there are those of us who carry other brands. The whole setup is a bit too proprietary to become ubiquitous. But hooking up with Sodexho is a savvy move by Nokia.

The food service company is the leading provider of food and facilities management in the U.S. and Canada, with $4.7 billion in annual sales. NPR listeners may recognize the company as Sodexho Marriott, a heavy public radio contributor. The company was a joint effort with Marriott, but all shares were recently purchased by Sodexho Alliance, the global number one food service company operating in 70 countries. The company pioneered their FastPass service, which allows customers to pay via prepurchased meal passes. We can expect Sodexho Alliance to roll the wireless solution out to its other operations if the Nokia campus trial is a success.

No lines at the checkout counter would be pretty cool, but I wonder how much time this solution will actually save. The RFID tag is activated when placed in the scanner’s radio frequency field, which is typically 2 to 8 inches wide. So unlike the recent TV commercials featuring a guy breezing out of a supermarket, paying via SmartCover involves digging your cell phone out and moving it through the scanning field. And I assume a human still needs to tally up the bill. RFID tags in the food, now that would be something.

While we’re at it, a pet peeve: Nokia cranks out more press releases than pretty much any company I follow, but their press section on their Web site never is up to date. They are not alone in this by any means. Perhaps by the time you read this they’ll have gotten around to post the PR.

One more pet peeve: incomprehensible navigation on corporate sites. The Sodexho, Inc. site is OK – at least they had the PR posted. But the Sodexho Alliance site is another triumph of design over utility. I merely wanted to find out how big Sodexho is and how many cafeterias they manage worldwide. Couldn’t do it. Get a clue, Web site designers. Try to organize a site so people who have real questions about the company can find the answers. The Sodexho Alliance site did have a FAQ section, with all of three questions in it, one about the chairman’s succession plans. Yeah, that one was uppermost on my mind; thanks for answering it.

Bottom line: Nokia’s scheme will probably work fine for employee cafeterias and other relatively controlled situations (but probably won’t fly in another Sodexho business: running correctional facilities). It’s unclear if Nokia’s SmartCover solution is vendor-specific or whether it can work with other merchants. (Peeve: a search for SmartCover on Nokia’s site turned up nothing. Great branding.) However, what’s really needed is some kind of wireless wallet solution where a previous relationship with the vendor is not necessary. Being the privacy advocate that I am, I would prefer a solution that does not require the wireless user to give up more information than he or she would if paying by cash.

2Scoot

Briefly Noted

• Famous Last Words: Boston Globe writer Beth Healy recently wrote a grimly funny column about some of the hyperbole surrounding the dot-coms (dot-com is now in Webster’s dictionary , but I don’t like the hyphenated spelling) in their heyday. Among the pompous quotes:

  ”The fastest growing industry in the world is the least risky thing to invest in.” David Wetherell, CMGI, now trading at $2.50

  ”What you have to understand is that we are very, very smart.”
  WebVan executive, which stupidly went under recently.

  To show that hubris is still alive and well, though, witness the remarks of Kleiner Perkins Caufield & Byers partner John Doerr in a recent speech : “I’m here today with something of an apology,” presumably for the whole dot-com boom and resulting bust. Or perhaps just for his famous quote, calling the Internet boom “the largest legal creation of wealth in the history of the planet.” (Doerr predicted the downturn would last through 2002, our favorite year.)
  Boston Globe (it’ll cost you)

• Auctions Are Hot: Think B2C eCommerce is dead? Nielsen//NetRatings says consumers spent $556 million at online auction sites in May, up 149 percent from the preceding year and up 65 percent from the preceding month. How’s that for growth? Not surprisingly, eBay remains the leader, with its share growing from 57.8 percent last year to 64.3 percent. Both Yahoo and Amazon have struggled to make headway in the auction market, but my personal favorite, uBid , increased its share from 9.1 percent last year to 14.7 percent.
  C|Net

• Invisible Copyright Infringement: This is a weird one: Women.com’s site, InternetHoroscopes.com, apparently reproduced text from horoscope site EasyScopes.com in white letters on a white background on every page of the site. Why? So search engines would take notice and increase InternetHoroscopes’ ranking in listings. Euregio.net, EasyScopes.com’s parent, is suing for a million Euros, despite the fact that the offending text has been removed. White text on a white background is a well-known trick to try to influence search engines. Since most search engines give higher weight to text actually found on pages (vs. text placed in META tags, for example), site designers sometimes place invisible text on their pages. However, since this procedure became common, many search engines discount text that is invisible due to font and background colors. Want to see what Web site designers are doing to increase the ranking of their pages? Try using the View Source command in your browser. Note particularly any text in a META statement.
  New YorkTimes (registration required)

Can’t Get Enough of ME?

In the unlikely event that you want more of my opinions, I’ve started a Weblog. It’s the fashionable thing for pundits to do, and I’m doing it too. A Weblog is a datestamped collection of somewhat random thoughts and ideas assembled on a Web page. If you’d like to subject the world to your thoughts, as I do, you can create your own Weblog. You need to have a Web site that allows you FTP access, and the free software from www.blogger.com . This allows you to right click on a Web page and append your pithy thoughts to your Weblog.

I’ve dubbed my Weblog entries “Stratlets”, and they are available at www.stratvantage.com/stratlets/ . Let me know what you think. Also check out the TrendSpot for ranking of the latest emerging trends.

Return to Mike’s Take

From Evernote:

StratVantage Consulting, LLC — Mike’s Take on the News 07/23/01 Clipped from: http://www.stratvantage.com/news/072301.htm

The News – 07/23/01

Broadband a Broad Yawn?

If you’re like me, you’ve probably heard about the coming broadband explosion until you’re sick of it. Tremendous predictions of 3G wireless networks and fiber optic capacity notwithstanding, much of the broadband revolution seems aimed at the voracious needs of large corporations. But consumers like us (face it, no matter how much you’re into business, you’re a consumer too) have had to put up with unreliable modem lines, high priced and error prone DSL connections, and cable modem service brought to you by those paragons of customer service, the local cable monopoly. Despite this, Forrester predicts that by 2005, 46.7 million U.S. households will have broadband Internet connections, up from roughly 3 million at the end of 2000. Fast access always seems to be in the future.

Well the future starts next year, when satellite broadband providers like WildBlue start offering 3Mbps bi-directional service (400Kbps upstream) to your rooftop. Using a 26" satellite dish and a small modem, the service claims it will be able to serve up to 8 computers, TVs or Internet-enabled smart devices. WildBlue service will be sold through 23,000 retailers that offer partner EchoStar’s DISH Network service. Can the six-year-old company make it work? Well, they’ve got a couple of satellite slots, FCC spectrum allocation, a contract for capacity on another satellite, and are contracting with Space Systems/Loral to build their first satellite. Founder and Chairman David Drucker helped found EchoStar. They’ve got money from Kleiner Perkins Caufield and Byers. However, the company’s marketing materials mention the dreaded First Mover Advantage, so that’s a strike against them.

WildBlue will have to compete with fixed wireless efforts from the likes of Sprint, whose Broadband Direct service uses a roof-mounted 13.5" diamond-shaped transceiver to deliver typical download speeds ranging from 512Kbps to 1.5Mbps, with a maximum upload speed of 256Kbps. Customers within 35 miles of a tower are eligible for the service, compared with all of North and South America served by a satellite solution. However, the fixed wireless space has already had its share of flameouts. Boston-based Broadband2Wireless went Chapter 7 just three months after launching their Airora service. The good news is Sprint Broadband Direct is available now. The bad news is the company is playing it close the vest about exactly where it’s available. You can go to their site and put in your zip code to find out, but they then remember the zip code and won’t let you try other markets without an exact address. From scrounging around I find it’s available in Arizona, the Bay Area, and Chicago as well as somewhere in Colorado, Florida, Indiana, Kansas, Michigan, Oklahoma, Texas, and Utah. Probably available everywhere by 2002.

As if that were not enough broadband options, there are companies planning on providing broadband access via airborne platforms like constantly-circling airplanes or blimps. The Halostar Network from Angel Technologies and Raytheon plans to offer a blistering 52Mbps via HALO-Proteus aircraft that will fly fixed patterns in the stratosphere (51,000 feet and higher) over major cities. The planes will fly above commercial airline traffic and adverse weather and can create a cellular pattern covering an area 50 to 75 miles in diameter. Such coverage currently requires several hundred cellular towers. The company plans on offering a measly 1 to 5Mbps service to consumers, but will up the ante “as the broadband market matures.” The company plans limited commercial service this year, which probably means a full rollout in, you guessed it, 2002.

Sky Station , led by Alexander “I’m in charge” Haig, uses an unmanned, lighter-than-air platform (AKA a blimp) which can be maneuvered on a guided path or held geostationary in the stratosphere at 68,000 feet. This platform has the advantage of eliminating pilot boredom, which is certain to be a problem for Halostar. Sky Station will offer speeds of up to 2Mbps uplink and 10Mbps downlink. And guess when Sky Station will be deployed. Yup, 2002. You gotta love the future. It’s always a year away.

Finally, it’s not at all certain that any of these technologies, other than fixed wireless, will ever deliver. Peter Jarich, an analyst at The Strategis Group, said, “I don’t know if any of these companies [offering broadband from aircraft] will ever roll out services,” says Jarich. “From just a general market standpoint, there’s not a compelling argument for it.”

Well, there’s always next year.

Business 2.0

Briefly Noted

• Shameless Self-Promotion Department: We’ve recently re-ranked the trends in the TrendSpot, adding a new trend: the Post-PC World.
  The TrendSpot

• Stupid Email Tricks: Last issue I considered the problems inherent in employee personal use of business resources. Well, of course there’s another side to it. Sometimes digital technology can be hazardous to your job and especially your reputation. Consider the following cautionary tale on the misuse of office email: “My girlfriend, who works for a very well known FMCG [Fast Moving Consumer Goods] company, sent 12 month marketing and promotion plans to one of her accounts. The file was in Excel and sadly, included in the workbook were other worksheets which contained promotion plans for ALL of the major retailers. The fortunate recipient now has this year’s promotion plans for all of their competition, largely due to her not checking the attachment before it was sent.” This and other hilarious digital blunders are included on a section of the UK site, Silicon.com.
  Silicon.com

• Microsoft Won’t Imbed Java in XP: For whatever reason, Microsoft is apparently abandoning Java. I say whatever reason because it depends on whether you believe Microsoft, who claims the industry has moved on from the proprietary language in favor of XML, and Java isn’t good at writing XML services. Or do you believe those who say the consent decree resulting from Sun’s lawsuit about Microsoft’s attempted hijacking of Java limits them to version 1.4 of the Java Virtual Machine? Given the software giant’s need to woo developers to its .NET strategy, it seems unlikely that they’d risk alienating the sizable Java development community. I tend to think Microsoft shot themselves in the foot with their “embrace and extend” treatment of the popular programming language. Your mileage may vary.
  Silicon.com

• When Is A Virus Not A Virus? Comedian Ray Owens is demanding a million dollars in reparations from Symantec and others who appropriated his intellectual property. The intellectual property in question is a joke virus warning Owens published on his site and to his 340,000 strong mailing list. Symantec printed the copyrighted joke in its entirety, violating, Owens says, the Fair Use doctrine. Owens wants his copyright attached to Symantec’s reproduction.

  At the risk of being added to the tongue in cheek suit, and in the spirit of Fair Use, here’s an excerpt from the warning:

It has been brought to my attention that there’s an insidious new computer virus which has already affected close to 30 million computers.

Even though I’m running the latest McAfee and Norton viri scans, neither have picked up this virus as it’s a mutating virus which isn’t set to go off until Friday, June 8, 2001.

As many viri are, this one is transmitted by email. I’m required by law to contact everyone that has received email from me in the last six months and warn them about this virus.

The name of the offending file? AOL.EXE, the file that launches the AOL service. The warning goes on to say that deleting the file will remove an upper memory management module and free your IQ to rise above 85. Owens received lots of email from confused users who took him seriously, much of it badly spelled and all in caps. It’s hard to believe Symantec took this warning seriously as a hoax; it was published on a joke site, for heaven’s sake. This incident is ironic (very much unlike a black fly in your chardonnay), since Symantec once sued Network Associates over 30 lines of copyrighted software code. Don’t worry. The comedian laughs last .
Vmyths.com

• First US GPRS Phone and Service Released: If you’re in Seattle, you have the opportunity to use the first US General Packet Radio Service from ATT, featuring phones by Motorola. The phone uses ATT’s new GSM/GPRS network, so I suppose a nationwide rollout will be slow (probably around, oh, say, 2002), since ATT’s current network is TDMA-based. GSM is a variation on the TDMA standard, but I’m figuring ATT needs to make lots of changes in its equipment to support GSM and GPRS. The only nationwide GSM network today is VoiceStream. GPRS is a 2.5G transitional standard that will eventually be superseded by 3G equipment. The Motorola Timeport 7382i phone can switch between data mode and voice calls without interrupting the data session and features voice activation, Voice Note voice recorder, a WAP-enabled microbrowser, IrDA connectivity and a data port. ATT recently completed their spinoff into an independent company.
  Motorola

Can’t Get Enough of ME?

In the unlikely event that you want more of my opinions, I’ve started a Weblog. It’s the fashionable thing for pundits to do, and I’m doing it too. A Weblog is a datestamped collection of somewhat random thoughts and ideas assembled on a Web page. If you’d like to subject the world to your thoughts, as I do, you can create your own Weblog. You need to have a Web site that allows you FTP access, and the free software from www.blogger.com . This allows you to right click on a Web page and append your pithy thoughts to your Weblog.

I’ve dubbed my Weblog entries “Stratlets”, and they are available at www.stratvantage.com/stratlets/ . Let me know what you think. Also check out the TrendSpot for ranking of the latest emerging trends.

Return to Mike’s Take

From Evernote:

StratVantage Consulting, LLC — Mike’s Take on the News 07/19/01 Clipped from: http://www.stratvantage.com/news/071901.htm

The News – 07/19/01

P2P Use May Be Even More Illegal Than You Thought

It’s fairly well recognized in the post-Napster world that using peer-to-peer technology can get you in trouble. Legal woes for Napster and its users, however, centered more around the copyright infringement issue, and not on the technology. Well, David McOwen , a now-former employee of DeKalb Tech, part of the Georgia state university system, may soon be arrested and face a maximum penalty of 15 years in prison – for installing a screensaver from Distributed.net on some of the computers at DeKalb.

So what could possibly be worthy of hard time in this case? Well, at first you might think of the stolen CPU cycles. Distributed.net farms out large computing projects to many participating computers, who work on them when they’re doing nothing else. Although idle Georgia state resources were used, it’s hard to see the foul there. The computers weren’t doing anything anyway.

It turns out the state wants to nick McOwen for using bandwidth, a very expensive amount of bandwidth. It claims that the Distributed.net client cost the state $415,951.49 in bandwidth charges, which it calculates at 59 cents per second or $1,529,280 per month. I want to be that college’s broadband provider! Especially considering you can get a full T-1 for under $900 a month in DeKalb county. So at that price, the state is claiming McOwen stole roughly 61 terabit-seconds of bandwidth, most of it in December when few students were in school. Clearly, the damages must be based on something other than bandwidth.

Leaving aside the preposterousness of the monetary charges, it’s clear that McOwen did make non-business use of state resources, along with probably hundreds if not thousands of other state employees. I can’t decide if Georgia is just that clueless, or if it merely wants to set an example by crushing this poor defenseless system administrator. Taking a look at the math, though, makes me lean toward cluelessness.

If you’re concerned about this travesty of justice, you might want to give David a hand. You can contact his attorney, David Joyner, of law firm Kenney and Solomon in Duluth Georgia, at cdjoyner66@aol.com or 770-564-1600.

Regardless of how you feel about McOwen’s plight, this story underscores a key issue that businesses will have to deal with regarding P2P computing. While it may be ludicrous to think that McOwen’s use of public property caused $415,000 in damages, it is entirely possible that employee use of P2P technology could damage a business.

Most applications in the hive computing or distributed computing class, like Distributed.net and the more famous SETI@Home, are fairly benign. They accept small chunks of data from a server on the Internet, and run as screen savers to process the data. The result is sent back to the server, and it generally is also not a large amount of data. It’s possible that employees will leave their computers on more when running one of these applications, and it’s even possible that they will get paid for using business resources. But outside of a little electricity and wear and tear on equipment, along with a little bit of extra bandwidth usage, there’s not usually a lot of direct damage to the enterprise.

File sharing P2P applications, however, are a different matter. Although there is a security risk in running even hive computing applications within the enterprise, the risk is magnified when employees run consumer-grade file sharing applications. Although Napster may be becoming a non-factor, there are many other services like Morpheus or KazAa springing up to facilitate music file sharing. Then there are other services such as Gnutella and Wrapster that let users share any kind of file, even sensitive company information. For more information on P2P applications, see the white paper, The Buzz About Hive Computing: Putting Peer-to-Peer Computing to Work , or the P2P for Business Directory .

Many enterprises solve these problems by identifying the ports and protocols the offending services use, and then blocking them. The problem is in keeping up with the myriad services, and knowing where to stop. For example, your employees may be using Instant Messaging (IM) clients such as AOL Instant Messenger, or similar programs from Yahoo and Microsoft. They may even be using these IM services to communicate with customers and suppliers. Plus, these clients can also allow users to share files.

Clearly the P2P phenomenon can mean a loss of control, at the enterprise level, over what happens on your network. Although there are many P2P companies such as Groove Networks , Mercury Prime , and 1stWorks developing secure IM and other secure collaboration technologies, adopting these solutions doesn’t address the problem of what to do with rogue Internet applications on your network.

At the very least, businesses should formulate acceptable Internet use policies and require employees to sign and abide by them. But make sure these policies have a heart. If you ban all personal use of the Internet, you’ll make scofflaws out of every employee who wants to check the weekend weather or occasionally visit a recreational site.

There’s no denying that non-work use of computers is a problem. According to the 2001 Web@Work study sponsored by Internet filtering vendor Websense :

• 20 percent of work computers have Napster on them.
• 45 percent of people send more personal email from work than from home.
• 63 percent of employers reported that their employees access non-work-related Internet sites at work, and 27 percent have experienced an increase in inappropriate employee Internet use this year.
• 34 percent of companies have reprimanded or disciplined employees for inappropriate Internet use this year.
• Of companies that have reprimanded or disciplined employees, more than one out of every three terminated those employees for inappropriate Internet use.
• 3.3 percent of companies overall have been involved in litigation from inappropriate Internet use.

Going hand-in-hand with usage policies is a comprehensive network security policy and an educational effort to ensure your employees understand the threat and the importance of adherence.

The P2P genie is out of the bottle. You may be able to stop employees from downloading Napster files, but chances are good there’s another bandwidth-sucking, security-administrator-bedeviling application around the corner. Good policies and good education will be more effective in securing and protecting your resources than prosecuting unwitting miscreants like David McOwen.

OpenP2P

Briefly Noted

• Shameless Self-Promotion Department: We’ve recently re-ranked the trends in the TrendSpot, adding a new trend: the Post-PC World.
  The TrendSpot
• Prepare to Get Toasted: Alert SNS Reader Larry Kuhn, recently employed by our favorite software

  monopoly, sends along this new bit of jargon about Windows XP. Seems that when you get an email on Microsoft’s next OS, a little window gradually pops up, much like a piece of toast. Within the software giant, people refer to this as Toast, as in “You’ve got Toast!” (Wait, that’s another soon-to-be-monopoly I’m thinking of.)

• Speaking of How Not to Run An Online Grocery: I swear I didn’t see the Keenan Vision analyst report, Grow Big Fast Fails for Webvan and Amazon, before writing the previous SNS . How could I? It was released July 18th, two days after my article. Hmmm. Coincidence? Anyway, here’s a quote from the report, which Keenan claims was inspired by the Webvan closing. (Alert SNS Readers may suspect otherwise . . .) “Webvan was fatally infected with a metaphorical disease that Keenan Vision calls the Grow Big Fast Syndrome. Also known as First Mover Advantage, GBF syndrome is a deadly disease that has killed off dozens of dot-com startups. GBF is a powerful affliction–it destroys ideas no matter whether they are smart or dumb.” When I was a dotcommie it seemed all we could talk about was the First Mover Advantage. How the mighty have fallen.
  Keenan Vision
• Nokia and Motorola in Turkish bath? Turkey’s Uzan family controls Telsim, the country’s second largest mobile operator. The company has failed to meet about $1 billion in debt repayments due to Motorola and Nokia and now the companies have hired a US private investigation firm to look into the assets and wealth of the family. In a common practice in high tech these days, the handset makers had provided Telsim with vendor financing secured by Telsim shares. Telsim, however, has apparently issued more shares, diluting the companies’ interest (Motorola’s interest was diluted from 66 percent to 22 percent!). Just as Cisco got tripped by vendor financing when the dotcom bubble burst, so now have Motorola and Nokia learned an expensive lesson about driving volume through deferred payments.
  eWireless News (requires registration)

Get an update on the stories in this issue. Visit the Wayback Machine .

Can’t Get Enough of ME?

In the unlikely event that you want more of my opinions, I’ve started a Weblog. It’s the fashionable thing for pundits to do, and I’m doing it too. A Weblog is a datestamped collection of somewhat random thoughts and ideas assembled on a Web page. If you’d like to subject the world to your thoughts, as I do, you can create your own Weblog. You need to have a Web site that allows you FTP access, and the free software from www.blogger.com . This allows you to right click on a Web page and append your pithy thoughts to your Weblog.

I’ve dubbed my Weblog entries “Stratlets”, and they are available at www.stratvantage.com/stratlets/ . Let me know what you think. Also check out the TrendSpot for ranking of the latest emerging trends.

Return to Mike’s Take

From Evernote:

StratVantage Consulting, LLC — Mike’s Take on the News 07/16/01 Clipped from: http://www.stratvantage.com/news/071601.htm

The News – 07/16/01

How Not to Be an Online Grocer

In the wake of Webvan’s recent closing, another online grocer, HomeRuns, serving Boston and D.C. has also abruptly shut down. The company was founded in 1996 by grocery retailer Hannaford Brothers but simply was allowed to run out of money.

Unlike HomeRuns, WebVan tried to go it alone, buying rival HomeGrocer for $1.2 billion in stock, and ultimately building $30 million warehouses in San Francisco, Atlanta and other cities. Last Monday, Webvan folded after burning through $830 million, closing operations serving 750,000 customers in seven markets: San Francisco; Los Angeles; Orange County, Calif.; San Diego; Seattle; Chicago; and Portland, Ore. WebHouse Club, Priceline’s grocery (and gasoline???) affiliate, burned through $390 million before calling it quits. Other dotcom grocers who cratered include Streamline, Shoplink, and PDQuick (acquired by WhyRunOut.com). Trailblazing grocery service Peapod, although still hanging in there, was forced to pull out of San Francisco.

It’s gotten so ugly for online grocers that the analysts are even backpedaling. Once upon a bubble, Jupiter Media Metrix predicted that Net grocers would rack up $6 billion in sales in 2002. Recently, the analyst firm lowered that estimate to $1.3 billion and even declared that “grocery delivery is economically unviable for the foreseeable future.” This may be true. Cyber Dialogue found that although 24 million American adults seek information about supermarket categories online, only 34 percent actually purchase them online.

So is Simon Delivers, a local Minneapolis area online grocer, crazy? Maybe, but their approach to the business could just work. I am a happy Simon Delivers customer. Aside from a few glitches (purchased items that did not show up), I am very happy to have groceries show up at my door once a week. They even deliver water softener salt. Simon Delivers doesn’t charge a delivery fee for orders over $75, they accept manufacturer coupons, and they even run specials just like a real store. But Webvan proved that great customer service and high customer satisfaction isn’t enough in this business where a 3 percent profit margin is the norm.

The main difference in Simon Delivers’ approach is their attitude toward growth. Rather than swinging for the fences and burning through cash building an infrastructure to serve millions, the company is deliberately widening their service area a little at a time. In fact, we had to wait when they expanded into our area before they’d take us as a customer. Simon Delivers now has 43,000 customers, and expects 2001 sales of $55 million (the recently defunct HomeRuns had $30 million in sales last year in two markets). The company forecasts becoming profitable, on a net income basis, in the next year.

Rather than burning investors’ cash building their brand and an expensive infrastructure, Simon Delivers’ method is likely to be more successful in the post-crash consumer eRetailing environment. But one thing has always puzzled me about online groceries. Why haven’t more food retailers followed Hannaford’s lead and gotten into online retailing?

Turns out they are. Global grocery giant Royal Ahold bought a controlling stake and has made an offer for the rest of the shares of the original online grocer, Peapod. The company is said to be retooling Peapod to serve its established chains, such as Giant Foods and Stop & Shop. Ahold claims to have successful online shopping operations with annual sales of 250 million Euros in The Netherlands, Sweden, Norway, Argentina and Guatemala.

In fact, Ahold’s been doing it online in Argentina since 1997. Disco, one of the country’s largest supermarket chains at 237 stores, has become the country’s leading e-commerce player. Its online sales have grown to $40 million, which ain’t hay when you consider eCommerce in Argentina is estimated by Accenture to be only $150 million. Online grocering was merely an extension of Disco’s decades-old home delivery service, which last year delivered a quarter of the company’s sales.

Obviously home delivery can work, and the combination of the warehousing infrastructure of established grocery players with slick online stores might be the key to success. Jupiter thinks that a hybrid model, where consumers order online, then visit the store to complete their shopping and find the groceries already bagged and waiting, may succeed. Gartner, while admitting that established grocers could make it online, wonders why they’d bother, since there’s no established model for success.

So, how do you not succeed in online grocery? Raise too much money, grow way too fast, and try to build everything yourself. Sounds like a good prescription for failure for any online retailing business. The prescription for success, however, is still being written.

The Standard

Briefly Noted

• Shameless Self-Promotion Department: We’ve recently re-ranked the trends in the TrendSpot, adding a new trend: the Post-PC World.
  The TrendSpot
• Wireless Stumble: Goodbye Ricochet? Metricom, provider of the Ricochet wireless service, has filed for bankruptcy. The service is expensive at $80 a month and will eventually be eclipsed by 3G wireless networks (but don’t hold your breath).
  Metricom
• 

  More Disposable Tech: Since the last newsletter, another prepaid disposable phone has come to our attention from, who else, prepaiddisposable.com . Parent TelAmerica appears to be a pyramid, er, multilevel, er, network marketing scheme in which consumers become distributors of the $40 phone. The 5-ounce digital/analog phone comes with 100 minutes of nationwide airtime. The company claims to have received an order for 10 million of the phones from a major corporation.
  TelAmerica

• Thumb Envy? Seiko Instruments Austin Inc. (SIAS) has introduced

  the Thumboard™ TB5000, which it calls the first integrated and mobile mini-keyboard solution. The device is basically a small, thumb-enabled keyboard for the Palm™ V series. So if you have thumb envy from watching Blackberry users thump out emails, this gadget’s for you. It slips directly onto the handheld, fully covering the graffiti area and interfacing with the serial port. Thumboard also includes Hot keys (Calendar, To Do, etc.) and text editing capabilities by way of the Command function key.
  TwoMobile

Can’t Get Enough of ME?

In the unlikely event that you want more of my opinions, I’ve started a Weblog. It’s the fashionable thing for pundits to do, and I’m doing it too. A Weblog is a datestamped collection of somewhat random thoughts and ideas assembled on a Web page. If you’d like to subject the world to your thoughts, as I do, you can create your own Weblog. You need to have a Web site that allows you FTP access, and the free software from www.blogger.com . This allows you to right click on a Web page and append your pithy thoughts to your Weblog.

I’ve dubbed my Weblog entries “Stratlets”, and they are available at www.stratvantage.com/stratlets/ . Let me know what you think. Also check out the TrendSpot for ranking of the latest emerging trends.

Return to Mike’s Take

From Evernote:

StratVantage Consulting, LLC — StratVantage News Summary 07/12/01 Clipped from: http://www.stratvantage.com/news/071201.htm

The News – 07/12/01

Disposable Tech, Part 2

Last time we talked about disposable tech as a bellwether for the integration of a technology into American society. Turns out a company called ResearchPoint claims to have trademarked the term “Disposable Technology™” and Disposable Technology®, Inc., maker of dental supplies, claims to have registered it. A search at the USPTO turned up no references.

At any rate, the DisPosAbleTech™ gadgets discussed last time, disposable cell phones and impending disposable laptops, both are made possible by a third disposable trend: disposable power sources.

Many of you have probably seen the ZincAir disposable cell phone batteries. These single use units are great if you’re on the road, forgot to bring your charger, and your cell phone is dead. Whip into a Wal*Mart and pick up a single use battery, and you’re back yacking in no time. For ten bucks apiece, they offer 8-16 hours of talk time and 130-500 hours of standby. The batteries contain no toxic chemicals and can be disposed of in the trash.

Incidentally, Electric Fuel , makers of the ZincAir, have adapted the technology for electric vehicles, offering a rechargeable ZincAir battery that they claim contains as much energy as a tank of gasoline. They even are working on powering a city bus for a day using the technology. While hardly disposable tech, it’s still pretty cool.

A piece of disposable tech of increasing interest to rock-loving Boomers is Songbird’s disposable hearing aid. According to the company, consumers between 45 and 54 represent the largest group ever with hearing loss (I blame Black Sabbath). Despite this, the company doesn’t really make clear why they think a disposable hearing aid will achieve better market penetration than non-disposables. After further research, I discovered that the lack of a battery door enables the device to feature a microphone that is seven times larger than comparable devices, yielding better fidelity. Would have been nice if the company had featured this bit of information on their Web site. The device lasts 30-40 days when used 12 hours per day and costs $39 per ear. This ends up being more expensive over five years than custom hearing aids.

Back on an information technology topic, computer printers are rapidly becoming disposable, with printer companies adopting the “give away the razor and charge for the blades” philosophy popularized by Gillette. Not only can you get a very nice printer for under $150, you can get one for under $50 (HP 630c ). When you consider that the color cartridge for such a printer costs as much or more, you can afford to buy a new printer every time the cartridge runs out. Of course, inkjet cartridges are getting more expensive. For black and white printing, it’s actually cheaper to buy a $400 laser printer than to keep ponying up $50 for a new inkjet cartridge every few hundred pages.

But the real disposable technology will really be here once MIT’s Auto-ID project is realized. For a little more depth on Auto-ID, see the TrendSpot . Unfortunately, their server was down as I wrote this, so I can’t provide an update on their activities. But generally, the idea is to put wireless tags on every consumer product and every manufactured good. So-called RF tags (radio frequency tags) are already used on train boxcars and pallets in warehouses. The goal is to bring the unit cost down under 10 cents, and then your refrigerator can reorder milk from your online grocery for you, or your TV dinner can tell your microwave how to cook it.

We’re heading into a world in which things will communicate even more readily than people. The revolution of disposable tech, combined with the wireless explosion, will change every facet of business, and our lives. Businesses need to be aware of these trends, and evaluate how they will affect future prospects. Is there someone out there right now creating a disposable version of your product? And what will the landfills of the future contain/leak?

AIAG Auto-ID conference

Thanks once again to Alert SNS Reader David Dabbs for research.

Briefly Noted

• Shameless Self-Promotion Department: Be sure to check out the P2P for Business Directory, recently expanded and revised. It tracks companies specializing in peer-to-peer technologies that businesses should know about. The directory has spilled over to two pages, and we’ve added a companion directory, Non-Commercial P2P Efforts that contains a subset of the main directory.
  P2P Directory

• Microsoft and Smart Tags: Alert SNS Reader Jacob Jaffe caught an error in my previous news items. Seems that Microsoft’s next operating system is called Windows XP, not Microsoft XP (duh!). Also, he pointed out that Smart Tags are already available in Office XP, and are a real productivity enhancer. To use them, Office users download Smart Tags voluntarily. Then, any documents they read or create in Office will feature the Smart Tag links. Sounds great and puts the user in control. Jacob also points out that anyone can author Smart Tags, and Web site publishers can include code that disables them for their pages. I’d prefer that Web site publishers be required to enable them if they want them to be used.
  Microsoft

• Microsoft Opens Desktop for XP: After a court ruling, Microsoft has decided to allow PC makers to not only add their own links on the XP desktop, but also to remove Microsoft-provided links, such as to Internet Explorer. Way to go, Big Guys!
  Microsoft
• Typosquatting Is Allive: While researching the previous two items, I inadvertently ran into a case of typosquatting, the practice of registering names close to those of popular sites, thus hijacking the keyboard-inept to your Web site. Try the link below and see where you go. BTW, a related trend is for porn sites to buy up domain names from defunct dotcoms and forward them to their own sites.
  Not Microsoft, Micosoft

Return to Mike’s Take

From Evernote:

StratVantage Consulting, LLC — Mike’s Take on the News 06/29/01 Clipped from: http://www.stratvantage.com/news/070901.htm

The News – 07/09/01

Disposable Tech

You know something has really entered the mainstream of American life when folks don’t feel bad about throwing it away. It happened to pocket handkerchiefs (Kleenex®); it happened to lighters (Cricket , 1961); it happened to cameras (Fuji, 1986). And now it’s happened to cell phones. Soon it’ll be laptops.

There are several companies making disposable or recyclable phones today. Dieceland Technologies has designed an extremely simple, call-only phone made of coated paper. Most of its circuitry is printed on the paper surface, with the exception of a few circuit chips and a battery source. The phones range from $10 for 60 minutes to $30 models with more features. Each can be thrown away, replenished with airtime or maybe even recycled. The company has more than 100 million units on order. That’s right, 100 million cheap, disposable phones hitting the streets soon from just one vendor. A paper laptop is on the drawing board.

Telespree’s phones are a bit more durable, and are made to be recycled. The AirClip portion holds the battery and number of minutes purchased. Consumers can purchase more air and battery time in stores that carry the phone. The phone is also call-only, but Telespree is working on one that can also receive calls. Telespree’s big innovation is the lack of a dialing pad; their phone is voice activated, employing technology from Nuance Communications .

A third company, Hop-On.com , recently inked a deal with fiber backbone provider Williams Communications that has Williams carrying all Hop-On’s long distance traffic for the next three years. Hop-On’s phone is also extremely simple – only two buttons – and comes with 60 minutes of talk time. The consumer uses a hands-free earpiece and dials via voice. The phone supports the GSM, CDMA, and TDMA protocols, but it’s not clear if that’s all in one phone or not. The company is developing a biodegradable plastic it will soon use to fabricate its cases. Hop-On is also working on call receiving services as well as a package of informational services featuring sports, weather, stocks and entertainment. Hop-On’s parent company is involved in Internet casino gaming, so we can imagine what the entertainment might involve. Despite the Williams deal, the future is uncertain for Hop-On. The publicly traded company has a market cap of $376,000 and shares traded on the pink sheets at $0.18.

Wireless carriers spend roughly $150 in cell phone subsidies for each new subscriber, according to Current Analysis . Prepaid plans are intended primarily for those who fail a credit check and are typically much more expensive on a per-minute basis than monthly plans. Prepaid users typically are not loyal to a carrier and don’t commit to buying a regular amount of minutes. Analysts figure teens and seniors are two groups ripe for cheap phone sales.

So what can we learn from the disposable phone trend? Well, basically that services are more important than ever. Assuming the phones will remain feature lite – no Internet, no WAP, no J2ME, no buttons to push – obviously the strategy is increased wireless penetration. Yet no one is going to get rich on $10 phones, although if Dieceland sells 100 million of them, well, that ain’t hay. The real revenue stream is in serving the users of those phones. But, wait. If the future trend for wireless phones is going to be stripped down phones with extremely simple user interfaces (UIs), what’s that mean for all the wonderful applications people are hoping to build?

A certain percentage of people who would otherwise buy the latest phone as their first phone will gravitate toward the simplicity and perceived cost savings of the disposable, especially once the phones can receive calls as well as place them. This means the penetration of the full-featured phones – the kind that need consultants to write apps for them – will necessarily suffer. Certainly, not everyone who would buy a disposable is a potential geek phone buyer. However, with handset sales no longer growing robustly, Nokia and others are counting on increasing penetration to maintain revenue.

On the other hand, let’s face it, the typical geek phone UI sucks. Converged PDA/phone combinations are only a little better. The simplicity angle of disposables just means more work programming the backend and some sort of voice interface like Nuance’s or TellMe’s . In some ways, this simplicity is more consistent with the usual function of a phone, to receive and give audio information. You also don’t have to be adept at doing two things at once: looking at and using a visual display while talking on the phone.

So who will benefit, no matter whether the trend is to geek phones or disposables? Voice interface vendors and consultants. That’s the service component this particular disposable enables.

Next time: other disposable tech.

SiliconValley.com

Thanks to John Skach and especially Alert SNS Reader David Dabbs for research.

Briefly Noted

• Shameless Self-Promotion Department: The latest issue of the Geneer Business Report, written by your humble servant, has hit the Net. It’s entitled Peer-To-Peer Computing and Your Business. And don’t miss the white paper, The Buzz About Hive Computing: Putting Peer-to-Peer Computing to Work , also recently available.
  Geneer

• Acme Rental Fines Follow Up – Alert SNS Reader Andrew Hargreave passed along this update from Slashdot regarding an earlier news item reported in SNS. The Connecticut Department of Consumer Protection has ruled against Acme Rent-A-Car in their practice of fining car renters $150 per speeding infraction. The decision was based on the fact that Acme failed to properly word their contracts when they indicated that fines would be imposed for speeding. Dept. Commissioner Jim Fleming also stated that the practice of renters being fined is illegal. However, the practice of tracking vehicles with GPS is still a legal practice. So the Roadrunner wins the round . . . again.
  Slashdot

• 3G Problems in Japan: NTT DoCoMo will replace all 1,400 of its 3G wireless handsets (model N2001, made by NEC). The company claims this is not a recall. Company spokesman Takumi Suzuki said, "We are replacing handsets to improve their function, not because of technical problems." Right. DoCoMo has recalled more than 400,000 non-3G handsets over the last year or so due to quality problems.
  BBC
• Broadband Density: America is not the most wired country in the world, at least as far as broadband is concerned, according to the Organization for Economic Co-operation and Development. South Korea leads with 9.2 broadband connections per 100 inhabitants, compared with 2.25 in America and a measly 0.08 in Britain. Canada even beats the US, while Austria is the most connected country in Europe. Bad execution is blamed for lack of penetration in many countries. Germany’s Deutche Telekom signed up 630,000 broadband subscribers last year, but only managed to hook up 135,000 of them.
  The Economist
• Hosting in Trouble? Once upon a bubble, Web hosting companies were the darlings of Wall Street. They were the “picks and shovels” guys providing the infrastructure for the Internet gold rush. Now one of the biggest of them all, Exodus, is in trouble and may not make it. Their stock plunged 65 percent recently, and they’re obviously taking on water. So much for picks and shovels. Businesses should ask a lot of questions about their hosting company in this difficult environment.
  Internet World
• One Fish, Two Fish: OK, I had to headline this item about Bluefish with a reference to the Dr. Seuss classic. Bluefish Wireless recently launched infrared access points for Palm PDA owners in Laptop Lane outlets in Chicago’s O’Hare and Atlanta’s Hartsfield International airports. During a three-month trial, users can download news from Reuters via AvantGo and purchase books, CDs, flowers, and wine. As if that’s not enough, users can earn United, American, or Delta frequent-flier miles from their purchases.
  Internet World
• What a Difference a Letter Makes: You may be familiar with the wireless LAN standard 802.11b, otherwise known as WiFi. It’s the de facto home wireless LAN standard backed by 3Com, Apple, Cisco, Intel, and Nortel. You may have wondered, “What’s up with the ‘b’? Is there an ‘a’?” Yes, there’s an ‘a’ and also several other alphabetic variations. A current problem with 802.11b is its use of the unlicensed 2.4GHz frequency, the same frequency occupied by Bluetooth, digital cordless phones, and even your microwave oven. The 802.11a standard moves to the relatively empty 5Ghz band and promises more than five times the 11Mbps throughput of WiFi. But that’s not all. The other variations of 802.11 also could be important, especially to business, in the next few years. See the article for a roundup.
  The Standard
• The Drive to Improve: Next month Maxtor will begin shipping a 100-gigabyte PC drive, the industry’s biggest to date. Costing $300, the drive will hold one hundred billion bytes of data, enough to store, for example, more than 25,000 MP3 music files or a hundred million memos you can’t remember where you filed.
  Wall Street Journal (subscription required)
• Microsoft to Drop SmartTags: Everyone’s favorite monopoly has decided to leave out a controversial feature from the upcoming release of Microsoft XP, their next operating system. SmartTags work in Internet Explorer and allow the software giant to link any word on any Web page to a site of their choosing. Despite being pretty annoying, this technique, which Microsoft is not abandoning forever, obviously would give it tremendous marketing power. Just what they need: more power.
  C|Net

Can’t Get Enough of ME?

In the unlikely event that you want more of my opinions, I’ve started a Weblog. It’s the fashionable thing for pundits to do, and I’m doing it too. A Weblog is a datestamped collection of somewhat random thoughts and ideas assembled on a Web page. If you’d like to subject the world to your thoughts, as I do, you can create your own Weblog. You need to have a Web site that allows you FTP access, and the free software from www.blogger.com . This allows you to right click on a Web page and append your pithy thoughts to your Weblog.

I’ve dubbed my Weblog entries “Stratlets”, and they are available at www.stratvantage.com/stratlets/ . Let me know what you think. Also check out the TrendSpot for ranking of the latest emerging trends.

Return to Mike’s Take