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Techaisle Blog

Insightful research, flexible data, and deep analysis by a global SMB IT Market Research and Industry Analyst organization dedicated to tracking the Future of SMBs and Channels.
Anurag Agrawal

G20 SMBs: PCs and Servers will be the top areas of IT investment as Economy Improves

G20 SMBs to spend US$455 Billion on IT in 2010 accounting for 89 percent of Global SMB IT spend
G20 Consumer/Households will Likely Spend US$96 Billion on IT in 2010 with a Household PC Penetration of 44 Percent
Anurag Agrawal

Tracking the Value Shift in Computing

Value Shift – It’s a broad term describing a directional shift within an industry. Every industry goes through such shifts periodically. Most of the time such shifts create new challenges and new opportunities. The impact is almost always big – industries re-structure, leaders fall and new leaders are born. Value Shifts rarely occur as a result of a single phenomenon. They are more akin to little ripples that build to a tsunami.

The computing industry has seen its share of value shifts over the last 3 decades – perhaps more rapidly than any other industry. That’s what makes it so exciting! I believe that we are poised for another such shift. It’s not about the Internet, Web 2.0, SaaS or Cloud Computing – these are merely ripples at the end of the day. The emerging Value Shift is about Device Independence.

The computing industry to date has largely been dependent upon PCs. In other words, the industry’s fortunes were tied to the adoption of that one single class of device. Everything else flows from that. Microsoft made the most of it earning billions as did others – including Google. But that dependence appears to be breaking down. I am constantly intrigued by two things these days – the phenomenal success of the iPhone and the current rage in PCs – Netbooks. After all, having spent the last 20 years tracking an industry where speeds, feeds and computing power have ruled, how does one explain people (in droves) buying a lower power platform with shrunken keyboards and screens? iPhones let you view the same websites and web applications that you access from Netbooks, notebooks and desktops. The experience from a usability standpoint is different for any individual device, but you can access the same information. And it’s not limited to websites and web apps. You can use any number of free products to access your PC using an iphone (read about it here ). In other words device independence.

The “Information Fabric”

Padmasree Warrior, the CTO of Cisco puts forth a compelling prediction – the emergence of an “information fabric”. I believe it. The fabric can be defined in many ways and a many levels – from the lowest level network protocols to the highest level where information is consumed by individuals and corporations. Most importantly, the information fabric, I believe, will not limit itself to allow consumption and utilization of information by a single device or even a class of devices. Instead it will enable consumption by a whole range of devices leveraging the unique user experiences of each device.

The Ripples that Matter

It’s not difficult to see the key technologies that are driving this Shift. Of note are continued advances in virtualization and remoting where performance and user experience is improving rapidly. But also worth noting are storage technologies that are becoming common to different kinds of devices – specifically flash storage, whereas in the past application performance was somewhat dependent on type of storage used. The commonly understood technologies impacting bandwidth, throughput improvement, network capacity, data center optimization also continually push us towards device independence.

value-shift

It’s All About Productivity

Ultimately the move towards device independence is about productivity resulting from the freedom to use the device that best suits the work environment at any given point is time (a smartphone, a PC, a Netbook or even a Kindle). A lot of pieces need to fall into place and getting to true device independence will take a long time but there is no doubt that the ripples that started this value shift are transforming into a Tsunami.

Abhijeet Rane
This email address is being protected from spambots. You need JavaScript enabled to view it.
Anurag Agrawal

The Power of Value Based Communities

There's been a lot of talk and blogging about communities being central to people on the web. The web, pundits say is changing from one of passive consumption to a participatory (I hate the word "interactive") experience. A lot of web x.0 sites such as Diggit, MySpace, facebook are exactly about that. Despite the talk and clear evidence marketing departments are mired in traditional approaches that do not directly address the power of Value Based Communities. Lets just call them VBCs for simplicity. I believe that these marketers ignore communities at their own risk. So what are VBCs and why are they important? Its easy to define a VBC - a community that comes together as a result of shared beliefs. Those beliefs could range from an interest in saving the environment, a love for dogs (or other animals), a passion for astronomy and so forth. Communities have existed throughout evolution. The first community was drawn together with a common belief in survival resulting in early instances of prehistoric man hunting in groups and forming families. Communities then are the basis of existence! indeed great changes have come about as a result of communities being created along shared values - The creation of America being a prime example. But enough about history. What about today? What role do communities play and why are they ever more relevant? One has only to witness the current election where Obama's message of "Change" is creating a voter community sharing a common belief and value that change is essential in government (Politicians in my view have been consummate marketers to creating and pandering to communities). It is amazing then that so few marketing efforts focus on understanding and mining the power of communities engaging instead in traditional marketing efforts. Market research in particular tends to fall short in this respect. Here are some reasons why marketers should actively focus on VBCs

1. Shared values = MOTIVATION: Every marketer seeks to understand what motivates a customer. Values are the strongest form of motivation that spurs action

2. Community = ACTION: A community comes together for the purpose of taking action, driven by a set of values. All communities without exception can clearly identify their purpose and values. Conversely, communities that cannot do so eventually fracture and fade away or give rise to new communities

3. Community = VALUED PEER INFLUENCES: A community's members are highly instrumental in impacting each others choices about a variety of things. The affinity brought about by shared values often leads to valuing a peer's recommendation and eventual purchase

As stated earlier, current marketing approaches often ignore these realities, in most cases either totally ignoring their existence or ignoring the values that created the community in the first place. Traditional marketing tactics place emphasis on a standard criteria such as customer's location, demographics, purchase preferences, race, age, education etc. - in other words, marketers understand the "what" and the "how" but rarely do they venture into understanding the "why" from a values perspective. And if at all they do, there is a broad generalization that hides critical differences among individuals. Among voters, for example, labels such as Republican or Democrat are supposed to indicate shared beliefs but the truth is that such generalizations mask shifts in values occurring within each party. Each party now has sub-groups such as Liberal Republicans and Conservative Democrats. Consumer group descriptions such as GenX, GenY also mask a multitude of values. I will stop here now and continue on this topic over the next few days. In the mean time, I look forward to your thoughts, comments and opinions in the coming days.....

Abhijeet Rane (This email address is being protected from spambots. You need JavaScript enabled to view it.)

Anurag Agrawal

Notebook v/s Netbook - A market segmented

Yes - Netbooks are all the rage right now but we at techaisle don't believe in the doom and gloom scenarios pointing to the demise of notebooks. This is akin to a donut shop that starts selling bagels. Yes there will be people that come in and but a bagel instead thereby cutting into donut sales or maybe the better analogy is of a shop that sells donuts and mini-donuts. Same product shrunken in size.

[gallery]

But is the netbook now the new notebook? Should PC makers be concerned about cannibalization? Conventional thinking might suggest that to be true. After all, digital music cannibalized (and pretty much destroyed) CD sales, DVDs cannibalized VHS tapes and the list goes on. In all those cases however the new technology delivered a different and unique experience that older technology could not deliver - ability to create your mixes in the case of digital music, buy one song at a time and better viewing experience with DVDs. Cannibalization = replacement but for that replacement to happen, the product has to offer something unique. This is clearly lacking among netbooks whose only claim to fame is being a cheap, lightweight and small device.

So why are netbook sales increasing. We believe two things are happening:

1. Highly price sensitive customers are taking advantage of lower prices sacrificing computing power, screen size, gaming ability etc.

2. A new segment of mobile device buyers are entering the market expanding the market for mobile computing devices.

This is perfectly logical looking at the evolution of the PC market which has increasingly fragmented over time as user needs evolved

1. Early desktop market - Homogenous needs/users - primarily business use. all desktops nearly equal in capability. Minimal price variance observed

2. Continued evolution of desktops - greater price variance, home and small business markets start opening up, growth in ISV base, hardware options, geographic markets

3. Emergence of laptops - addresses latent mobility needs. Few laptop suppliers, premium prices and limited adopters driven by mobility trading off desktop capabilities for mobility

4. Expansion of laptop/notebooks -  better hardware, greater price ranges observed for notebooks. Consumer, SB notebook market emerges. Mobility remains the primary driver but better price performance drives cannibalization of desktops. However, not all desktops will be replaced (at least over any reasonable forecast period). desktop replacement by notebooks will hit a wall at a point where the desktop value proposition exceeds that provided by notebooks

5. Expansion of mobile computing - Mobile computing becomes pervasive through a multitude of devices, netbooks being one of them. Inclusion of phones as viable mobile computing devices expands available price points, user experiences and user needs/behaviors

So while netbooks have been able to expand the market today by attracting new buyers and addressing latent mobility needs (need for small, lightweight device), market expansion will be limited by what we call the "value proposition differential" - the subjective and objective differences in user experience between products. This is a concept that Apple understands very well as evidenced by the success of iPods and iPhones

In other words, while pricing and weight got the market started, it will not be enough to sustain the growth of netbooks.

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