Trends I'm Watching

Is Advertising Moving from Print to Online?

Source: BusinessWeek.com: Hard Questions From Google

Asking advertisers: What's the right amount to spend?

...Google is a $3 billion player in hyper-targeted ads via its business selling AdWords and AdSense. Also coincidentally, [CEO] Schmidt's stirring vision of the future in which technology drives economic liberation places Google more or less at the center of everything.

It's tempting to overstate the significance of all things Google, and it has been overstated, many times. We have seen much of this movie before -- the nearsighted geek outlining the technology-enabled, blue-skied future that's ineradicably linked with that geek's business. (Although it most plausibly starred Bill Gates, many other actors auditioned during the dot-com boom.) The thing about Schmidt and Google, though, is that Google's offerings actually -- how do you say this? -- work well. Old Media executives who didn't profess boredom at Schmidt's speech -- he's not the most dynamic performer, but this is a crucial part of the act -- expressed something like quiet terror.

Of course, entire established media and marketing forms don't disappear overnight. And there is a pretty big boneyard of once-dominant tech names ranging from Atari (ATAR ) to Wang Laboratories. Google is a product with zero switching costs; if a different and better search site comes up tomorrow, there's nothing stopping a mass consumer migration.

So Google isn't invincible, and the realistic fear isn't that TV and newspapers will vanish. The realistic fear is that ad dollars will shrink an additional 10% or 20% as their long-held value is assaulted by a worthy adversary. Google provides an automatic return-on-investment measure for a marketing world increasingly obsessed with ROI. If someone clicks on a company's link, it pays; if someone doesn't, the company doesn't. This comes as corporations are demanding better accountability for their massive ad spending.

At the conference, execs from some of the most traditional companies (who control some of the biggest marketing budgets) described big shifts away from traditional media. Wachovia (WB ) Chief Marketing Officer Jim Garrity said his research on ad effectiveness would sadden broadcast TV execs but gladden employees of Yahoo! (YHOO ) and -- yup -- Google. Joseph V. Tripodi, a good-humored old-school salesman, is Allstate's (ALL ) chief marketing officer. He told me Allstate's spending on "nontraditional media" -- from the Internet to sponsorships -- increased from 5% to 25% of its marketing budget in recent years.

Flash memory replacing hard-drives

Source: In a flash, hard-drive memory fading - Yahoo! News

Flash-based devices store content on a chip, which unlike a hard drive contains no movable parts. This means flash players use less battery power -- 30 times less --than hard-drive players, as well as being much smaller and extremely durable.

The trade-off is that flash memory chips have a limited storage capacity and a higher price than their hard-drive counterparts, which boast 10 times the capacity at half the cost.

PLUNGING PRICES

But flash costs are dropping dramatically. According to semiconductor research firm iSuppli, the price-per-megabyte cost for flash memory has fallen 56 percent in the last year. The firm projects the price will fall an additional 47 percent by next year and then another 33 percent by 2007.

Memory capacity also is improving. Samsung plans to begin mass-producing 16GB flash-memory chips by the end of next year and points to a 32GB prototype on the horizon.

This improvement in flash technology is one reason Apple replaced the micro-hard-drive-based iPod Mini with the flash-based Nano.

Analysts believe the falling flash prices are key to the evolution of the MP3 player as a mass-market device. Jupiter Research estimates there will be 56 million MP3 players in the world by 2010, and more than half will be flash devices that hold 1,000 songs or less, with about 5GB.

"Flash-device sales will surpass hard-drive sales," Jupiter Research analyst David Card says. "But the technology is not important. What's important is reaching a certain capacity at a certain price point at a certain size."

Why is More Software being offered as a Service?

Source: Partnerworld Industry Networks : Blogs : Amy Wohl.

This represents a clear change from a few years ago when software services were still considered oddities, reserved for something special, or to address a market that it was hard to sell traditional, packaged software to.

In the meantime, several things occurred:

(1) We became much more familiar and comfortable with using the ubiquitous web.

(2) We got a lot smarter about how to write software that exploited the Internet (rather than merely trying to repurpose software written for traditional implementation onto the Internet). This blog has addressed this issue many times, so we'll just mention two items in passing -- writing software that permits the user to be their own system administrator and writing software that permits multi-tenancy (many users to share a single server in a secure fashion).

(3) We discovered that customers were willing to make a different set of trade-offs in purchasing software:

-- Lower prices could justify less customization
-- Instant (or nearly instant) implementation and immediate usability could justify less control
-- Being able to outsource non-critical applications could free up scarce IT resources for higher priority projects

(4) The idea of where an office is or who's on a team changed radically. Today, offices can be anywhere, from the brick-and-mortar offices of the past to cars, hotel rooms, and desks at home. Teams are not just fellow employees, but may also include contractors, suppliers, and customers. In both cases, providing them with common on-line workspaces and access to applications and data is much easier in the flexible, dynamic world of a Software Service than in the behind-the-firewall world of IT, with its necessarily tighter security rules and project lag cycles.

via Emergic.org

Big Changes for Hardware and Software?

Is this the beginning of the commodization of hardware and software?

Source: Rough Type: Nicholas Carr's Blog.

In just the last few weeks, we've seen, particularly on the software side, growing signs of a sea change. As consolidation, commoditization and weakening demand turn traditional packaged software into a rust-belt industry, dominated by a couple of big suppliers looking to milk the installed base, innovation and growth seem to be shifting quickly to the software-as-a-service (SaaS) arena. Pushed by diverse utility upstarts like Google (on the consumer side, so far), Salesforce.com, RightNow Technologies, 37signals and Rearden Commerce, traditional software makers are now jockeying to position themselves as players in the SaaS world.

Software applications are, of course, only one side of the utility model. The other side is the infrastructure - the trillions of dollars worth of hardware and system software that companies today maintain privately, within their proprietary data centers. That, too, is an obsolete model, and the shift to a rationalized, "multi-tenant" utility infrastructure will likely entail even more profound changes than the related shift to software-as-a-service.

via Emergic.org

U3 Extends USB

Source: Ken Novak's Weblog.

U3 - New USB memory/device standard: U3 makes the promise of anywhere, anytime, any PC computing a reality. By combining the widely adopted storage capabilities of today’s UFDs (USB Flash Drives) with the ability to transport and run applications from a small UFD, U3 ensures truly personal and portable computing.   The U3 standard enables developers to create easy to use applications that minimize the complexities of today’s digital life. From your own email folders to healthcare history to fully functional work applications, U3 makes everything available anywhere without having to access multiple devices or lug around a laptop.

Medical data made whole / Health exchanges hope to offer all patient records in one place

Link: Medical data made whole / Health exchanges hope to offer all patient records in one place.

One of the main stumbling blocks in the American health care system, many experts say, is the inefficient use of computer technology to manage medical records.

Outsourcing Design

Link: BusinessWeek Online Extra: "Design Is a Commodity".

Michael E. Marks, CEO of Flextronics, has a radical view of the future of America's electronics industry. Just as manufacturing and logistical operations began shifting en masse in the early '90s to companies like Flextronics (FLEX ), which sent most of the work to its factories in countries like China and Mexico, Marks predicts an equally dramatic shift will occur in engineering and design. As a result, many of today's giant electronics and telecom hardware companies will massively downsize their in-house R&D operations.

Invisible Hand Moves Housing

Link: Far From The Madding Crowd.

With housing prices on both coasts at nosebleed levels, more and more professional-class migrants are cashing out of their homes in New York, the Bay Area, and Los Angeles as though from premium-heavy dot-coms. Motivated by favorable capital-gains rates, fears of a housing bubble, and worries of a sideways stock market over the next decade, they are moving to value-priced regions of the country, creating tiny pockets of blue America in the heart of the red states. Experts are calling the trend "geographic arbitrage."

Will CableCards Change Television?

Link: Interactive TV: What's In The Cards?.

How do CableCards work?

CableCards slip into a built-in slot on the newer digital TVs as well as on upcoming DVR models from TiVo Inc. (TIVO ) Hewlett-Packard (HPQ ) also has a similiar product in the works. With a CableCard, you can get rid of your cable box and plug your cable directly into your TV or recorder box.

How will CableCards change the way you view television?

Moore's Law for consumer electronics?

Moore's Law is one of the reasons that inflation has stayed relatively low.

Link: Werblog: Honey, I shrunk the camera.

We're used to the Moore's Law cycle of increasing price-performance for personal computers. Double the speed, or half the price, every 18 months. We're not used to the same curve for consumer electronics. VCRs, film cameras, and TVs get better year-to-year, but not like this. For the first time, the technical guts of my camera are functionally equivalent to the technical guts of my PC, benefitting from the same process improvements and economies of scale.

I don't think anyone has quite fully processed the implications of Moore's Law for consumer electronics. It means a different upgrade cycle for vendors, and different expectations for customers.