iPhone Not Recommended

A board member recently asked me “Do I recommend what type of smartphone for people to buy?” The answer was a low, but elongated No. The reason is that I might as well be trying to change people’s religious and political beliefs. Also, I make no revenue on the advertising or sales of any manufacturer’s smartphone.

iPhone Not RecommendedUnless you’ve been living in a cave the last few months, you know that September 10, 2013 is when Apple will unveil the next iPhone. As with each of the last 6 years, Apple is releasing the enhanced 5S model before a new iPhone 6 is released next year. One unusual wrinkle is that a low-cost 5C model will also be released, in which you can choose from a variety of colors for your iPhone.

Generally, if your mother or grandmother just needs a simple phone, then get them an iPhone. If you have a pre-teen who lives in the bubble-gum consumer world of music and needs to text you from school or call when they are home, maybe the iPhone 5C model fits the need. However, to say the cool factor has worn off and the iPhone is not relevant is an understatement, for something that is basically just a larger iPod from 10 years ago.

Out of the gate last September, Apple got a huge push in sales for the holiday season. However, after the holidays, iPhone 5 sales slowed down drastically and missed all sales projections. With consumer complaints increasing and Apple stock sinking, the impending iPhone 5 flop signals a turning point for Apple. When you Google “don’t buy an iPhone”, there’s currently something like 2.6 billion results. To be fair, a significant amount are the annual “hold off a few months because the new model is coming out soon”, as well as the plain anti-Apple rants.

Regardless, the real reason iPhone is not recommended is because Apple is a closed system that doesn’t play well with others and has no offerings for the bulk of consumer and business needs. Except for iTunes and music, everything else you connect to or use with iPhone is generally dominated by Microsoft or Google – from e-mail and productivity apps to search and video and gaming. That’s why Android leads the market and Windows Phone is making a come back.

Ok Apple fan boys and girls, take a breath. I appreciate iCloud, but it’s nothing compared to Office 365 or Google Apps. Sure, there are 50 billion iPhone apps, except the vast majority of iPhone apps are dead or the most popular are already built-in for Windows Phone or Droid. The one thing that would really help iPhone is either licensing ActiveSync from Microsoft or re-writing their custom code from 2007, so iPhone can reliably synchronize e-mail, calendar, and contacts.

That’s my main beef with iPhone and I worry about the current Apple general business model. Let’s take a wildly popular and profitable device like iPhone, then release minor improvements more slowly and with fewer features than the competition. When the value starts to erode in the minds of customers, slash prices and sell a once exclusive device in Wal-Mart and any other willing discount retail environment.

The next shoe has already dropped, as fanatically loyal Apple customers see the Macbook Pro discontinued in Europe, but rumored demise eventually everywhere as it is not an iOS device. You see many more Macbooks as props on TV than in the real world. Supposedly, that is because of the iPad that hasn’t really changed since 2010 and is currently getting humiliated in Surface versus iPad commercials for lacking basic features like no multi-tasking or missing thumb-drive support.

Hopefully, Tim Cook can adjust Apple’s strategy. Failed mapping has shown that Apple must be willing to endure years of flogging while building their own offerings, or focus on successful niche areas. Adding high-priced watches and TVs to the Apple stores, with comparably fewer features than established competitors, seems like a tactic out of the defunct Sharper Image playbook. In this age of social media, how out of touch is Apple that after all this time there is still no Apple corporate blog of any kind?

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Personal Use Office 365

Office 365 LogoI often hear the same complaints:

  • My ISP e-mail sucks.
  • Maybe I should do that Carbonite thing to backup my files.
  • A new copy of Microsoft Office costs how much?

So let me give you an idea. Use Office 365 for your personal account. How many of you want to write a book or have a hobby or simply want a personalized e-mail address? Maybe you’ve already registered that domain name. If so, for $20 per month you can have:

  1. Enterprise grade e-mail with 25GB of storage and unlimited archive storage.
  2. 10GB of document storage AND disaster recovery that you can access from anywhere.
  3. An always current copy of Office Professional that can be installed on up to 5 devices.

Basically for less than the cost of HBO that you rarely watch, you can have better technology and peace of mind. Try Office 365 free for 30 days.

2012 In Review

2012 In ReviewWordPress.com has begun providing annual reports and I wanted to share the most popular posts of 2012:

  1. iPhone 5 Flop – Apple sold millions of the new device, but failed to meet sales expectations. Maps was a huge debacle, battery life is still bad, iTunes continues to wipe data, and e-mail ActiveSync problems remain.  Apple stock is down more than $20 Billion and the hip and young crowd no longer think Apple is cool.
  2. 10 Tips for LinkedIn Ranking – Many of the ranking tips still apply, but LinkedIn has eliminated applications in favor of directly linking media and documents so look for an update to this post in 2013.
  3. SEO Sabotage – For the effort involved, you could definitely work on improving your own content and value to customers. Hopefully, tools like the Google Disavow will eliminate this pending cottage industry.
  4. Windows 8 Review – To the amazement of the lame-stream media whose mindset seems to be stuck at the turn of the century, Windows 8 is on pace to outsell Windows 7.
  5. WordPress.com Google Authorship – Author rank will be one of the most important aspects of content marketing in 2013. I recently changed my blog theme and have updated information for this post.

THANK YOU for following this blog and I look forward to providing more expert business and technology insight for 2013.

IT Firms Make Less on Cloud

Many of my peers often ask if they should get into cloud computing. I generally tell them a flat “no” with an explanation that they’ll make less money, a totally different sales/marketing approach is required, and technical competencies change drastically. The next question is usually something like, “OK, Kevin, then how are you so successful at it?”.

This is the fourth year in a row Matrixforce has achieved the elite Microsoft Cloud Accelerate Partner accreditation, with over 50 new customers and 2,000 users annually. We started three years beforehand when most people thought of cloud computing as something about the weather.  Today, we offer deployment and support services for Office 365 and Google Apps, Windows Intune, CRM Online, and Quickbooks Online – not to mention current training on Azure and competing cloud platforms. The sales and marketing team provide thousands of social media updates, hundreds of web pages and blog posts, and dozens of videos and podcasts. The technical folks are now all about productivity and usage of services and only a tiny bit of specialized old-school technology infrastructure. It’s been a long-term approach to grow a practice to compliment our other services that our firm took nearly 7 years ago. For certain, providers must have at least 5,000 to 10,000 individual subscribers, before the recurring revenue is enough to be significant and still can’t stand alone as a separate business. Most providers don’t survive longer than 5-7 years, much less have the resources and bussiness savvy to make the investment to try to get to those numbers of subscribers in that period of time.

Many prospects and customers have gotten the message loud and clear from the competition, that they need to stay on-premise with their technology infrastructure. “Why cloud computing is not reliable or secure.” Or you get the picture. Then the pitch is “You should just move all those servers into our data center. It’s not any cheaper, but we take care of all the hassle for you”. Hosting or rack space is definitely not cloud computing and brings forth questions of significant risk with the facility and provider’s long-term viability. Cloud computing uses knowledgeable experts backed by multi-billion dollar facilities provided by major manufacturers like Microsoft and Google. Further, the whole value proposition is reduced cost for significant improvements in productivity, reliability, and security.

I can’t blame the competition as the motivation is self-preservation, because switching to cloud computing eliminates 70% of product revenues and 30% of maintenance services. In hard dollars, that $50,000 annually in revenue for a few servers with associated software GONE – $250,000 loss in 5 years per customer. To add insult to injury, that $20,000 annual project and $10,000 in maintenance and support evaporates too, for another $150,000 loss over 5 years. So, the traditional legacy provider takes s $400,000 hit over 5 years in a moderate customer environment of 6-10 servers. Less product revenue equates to smaller discounts with distributors, coupled with more bench time for idle system engineers. Legacy providers face a grim business disruption problem of slowly dwindling cash and relevance.

Plus, the slick smile and dial, NASCAR like logos and product of the day – or selling a body for staffing or a project don’t really apply anymore. For sure prospects and customers don’t like it. Today, customers want to find out who you are and expect tons of information to research and have informed opinions before they even talk to you.

A few competitors are trying to change, but face a huge uphill battle with existing staff and any cloud wins are tiny infusions of cash even less than shrinkage currently experienced on legacy on-premise infrastructure. Some competitors have doubled-down and gone the niche high-end hardware route. Many have got in the way-back machine for circa 1989 and are pitching hourly rates with no means to provide availability or quality service on a regular basis. Finally, the overwhelming majority are obfuscating reality and bilking the unsuspected into moving servers to a data center at little savings in cost and no escape from the product obsolescence hamster wheel.

Meanwhile, prospects and customers love our offerings. They appreciate straight technology advice not motivated by product or selling them a body. Already knowing quite a bit before we even speak, we prove our capabilities by telling about all the stuff they need to know that is not on the web. Having prospered over 35 years while surviving virtually every war or challenge for a technology firm, customers know we are stable and practice strong business and operational skill. When you are serious about the cloud and online services, give me a call (918) 622-1167  x25.

Disaster Drills

How often do you try out your disaster plan? If you’re a small or medium business, the default answer is “what plan?” or “we’ll find out when it happens”. The reason is cost, complexity, and apathy. CFO’s balk at the cost of most technology. Technology folks struggle with where to start and how to justify, as not all disasters are equal or require the same response. Finally, the norm for most management is that even when knowing the first 2 facts, they do business as usual because “it’s never happened before because we have smart people and redundancy” (or whatever helps them sleep at night).

Rather than bore you with steps to take to recover from a disaster, the following are some current and nominal cost approaches of how we run our business (and of course help clients do the same):

  1. Recently, a key employee’s spouse was badly injured in a car accident. We were able to advance some additional salary for a short period during the spouse’s recovery. Cash is king in business. You don’t want to have too much as it signals possible operations problems to potential buyers and excess dollars should go to shareholders, but you must have enough on-hand or readily available to cover such situations.
  2. After another summer storm, our main domain controller died. As best practice, this server shared no data or ran any key applications. The second domain controller took over ready and able to service the whole network, using DHCP failover strategy. While operations ran normally, our team was able to seize critical roles and manually remove the domain controller from Active Directory.
  3. Major storage for a client failed. Fortunately, our online backup had a full copy of the data, including databases and server system states. We managed to keep the storage running in a degraded state and minimized customer downtime, by moving data and virtual servers to other locations. Online backup continued to run regularly and after the hardware problem was resolved, the data moved back and synchronized with the off-site backup.
  4. A contractor blew the transformer for our building. Fortunately, we run our business using cloud computing with services like Office 365. Our personnel were able to easily and securely work from home for a day with no loss of operations for customers.

Now the scary part – all of these things happened in the same month. We survived because of business acumen with little additional cost. Our Virtual CIO services can help you identify how to run operations that are disaster ready. If you were the average business, would you still be in business without your key employee, main server, critical data, and a power outage?

Eliminate Bottlenecks

Is this year going to be better than last year? I can already say yes, but can you?

The reason is the elimination of several bottlenecks in our business. It took most of last year, but two major issues holding us back were eliminated by process change. We estimated the changes would save us approximately 500 hours this year and about 10K in capital investments. More importantly, the changes help us focus more on clients. Already, the board and myself are seeing improvements in staff motivation and better understanding and service.

Too many businesses fly into the new year with great hope, but no direction. Management is clobbered with year-ending and beginning tasks, so it’s business as usual. What are 1 – 3 things that if you “fixed”, would help management, staff, and customers? Think strategically and if it is just one thing that has a significant positive impact, that is still huge.

We moved our Customer Relationship Management application that runs both our sales and support operations to cloud computing. We exported the data, customized a few forms and reports, and in full operations in less than 30 days. A bottleneck was removed for staff as all functions could now be done in one place. Our management team had one less thing to worry about off of our business continuity list. Finally, customers reap the biggest reward by some new features and more focus.

One of the major reasons you use a Virtual CIO is to eliminate those bottlenecks which become a win/win/win for all involved. Here are a few examples we’ve done for other clients:

  • Increased inventory turn double per month by integrating data collection for a large distributor
  • Increased product shipments 6,000 tires per day for a major manufacturer
  • Saved energy conglomerate $24 million annually in freight processing
  • Reduced IT costs $86,000 annually for local law firm
  • Lowered communication costs $225,000 for a municipality

Unfortunately, identifying the bottleneck and how to remove them are two different skill sets. If you’re tired of the status quo, inquire about our Virtual CIO service (918) 622-1167 Option 3.

Winter Ready

One day in late October, the day ended at 91 and then just like that the next morning it was freezing and the high was in the 50’s. Then the Northeast got dumped on and just like that it was flashback to ice storms of 2007 for Oklahoma – only this time the 5 inches of ice also had another two foot of snow. The state was gridlocked, but the world didn’t care. They were out of the polar blast zone and customers had needs and employees had to work to earn a living.

Fortunately, Edward had learned a lot since then and his company wouldn’t suffer through the following 2 weeks. In 2008, he hired a Virtual CIO that helped to reduce the amount of servers and IT cost with managed services. Accounting, CRM, e-mail, and standard documents had all been moved to cloud computing for better security and built-in business continuity at much less cost. The IT guy Bill was great, but we no longer needed him and fortunately the Virtual CIO was connected and landed him several other opportunities.

In 2009, Edward helped the economy and moved to another house where the power lines were buried. He’d also picked up some disaster recovery skills having an annual backup of SharePoint Online on an external drive, critical contact information, and extra battery backup at the house. Whether a disaster or sunny day, employees accessed the applications from anywhere there was Internet access. No costly failover to Houston or wherever or liability of having employees try to travel to a failover facility or underground bunker that was likely flooded and unreachable. Add a few cheap mifi’s and you’re good to go even if your cable or satellite goes out.

Most of Edward’s peers still wanted to “touch” their servers or had contracted with some local hosting company, that was either over-run with those fortunate to make it to those facilities or otherwise occupied with the misery of new prospects. All the while their employees were at risk for severe injury or death, the cost was overbearing, and even so business was at a standstill. Of course, Edward knew he was lucky as few technology companies understood the cloud or even the business processes of moving there. If the company hasn’t been around for more than 20 years with proven industry recognition, skip them and run not walk away from the “we’re gold, platinum, diamond” whatever pitch of the day.

The phones had been remotely forwarded. There was another order. Purchasing processed it and the sales people had even put a few opportunities into the pipeline. Accounting processed the invoices and payroll. Marketing had updated the website and was responding to followers via Twitter. All in all, employees had a couple of days working from home in pajamas by the fire and most importantly customers were impressed and knew the company was there for them when most of the rest of the industry was not.

Kevin Fream on Google++Kevin Fream