The “Ectors Principle” says that it is impossible to be excellent at hardware, software and services. You have to pick one and at most two but you can’t have all three.
Why can’t you be excellent at all?
Hardware is a discipline that requires you to define everything upfront and then to produce in as large volumes as possible to get to the lowest price per unit. It is a volume business with low margins.
Services requires people that understand customers ‘ problems and try to find solutions for them. It focuses on integration, customization, support, etc. To double revenue, you need to double the workforce.
Software is the art of combining easy to use solutions, with extensible and customizable features at an optimized and acceptable level of performance and availability. Smarter programmers can win from armies of dumb programmers.
So how can you combine a hardware platform that needs to have all features prebaked, with a people business that focuses on adding new features for each customer, with a software in which the art is to offer more with less features because feature overload kills ease of use, performance and availability? The simple answer is you can’t do them all well. You have to pick.
Who is trying to prove the “Ectors Principle” wrong?
IBM, HP, etc. come to mind when the words hardware, software and services are mentioned. How are they doing? BAD!!! Please name 5 HP software products that you find inspiring! IBM at least realized that being excellent at all three is hard and sold its PC and server business to focus on services and software. A word of advise: spin-off Power processors as an independent company!
Apple? Apple is not in the services business because you can’t have a closed software and hardware ecosystem and try to customize it to everybody’s needs.
Google? Google tried hardware with Motorola (failure!) and Nest but is not focusing on services because they don’t want to have to hire double the amount of people to double revenue.
Amazon? Hardware is proving difficult. Enterprises cloud services was a stretch.
General Motors? Do you like the software that comes with cars. Would you call it excellent?
Cisco, Ericsson, Huawei, Nokia, etc.? Software defined networks will kill their hardware margins in the next months/years. Alacatel Lucent just threw in the towel. More consolidation to follow.
General Electric? Wait until everything becomes “smart”. If GE is smart then their smart fridges have app stores with apps and peripherals from others. If not it will not be pretty.
Focus on one
Ideally you focus on one discipline and have another one as a hobby at most. Trying to do all will result in a weak link in the chain. The exact link that competitive startups will focus on to bring the imperium on its knees…
Every industry will be affected by IoT. Homes, businesses, cities, farm land, seas, space, etc. will get sensors. However the first IoT devices that will be massively adopted will not be a new breed of devices. They will more likely be devices we already know but will come with extra connectivity options and other IoT features.
Why not new devices?
For any new device that customers don’t know, you will have to educate the users, setup a new distribution channel as well as aftersales services offerings. This takes time and is risky and as such device manufacturers will not massively produce them from day one. The result is that new types of devices will cost more than the magical $100 for which they auto limit their market success.
What will be the first IoT devices?
You can already say that Bluetooth scales, Nest thermostats & firedectors, Phillips Hue, etc. are the first IoT devices alongside Fitbits and other wearables. However these devices are single purpose devices that often don’t do more than their non-connected counterparts. Let’s call them the Internet of Isolated Things because out of the box, most of them work only with their app or their cloud and none has any meaningful peer to peer relationships. They only allow other devices to be a remote control.
The real revolution in IoT will start when devices will not come with everything prebaked by the manufacturer. As soon as for instance a storage NAS is able to run multiple IoT apps to connect to your Bluetooth scale, your Nest firedectors, your Hue lights and your Fitbit will we see the real power of IoT in the home. From that moment onwards you will see something amazing happening, devices together will have synergies that weren’t there before. You will have the lights in the living room go red, Fitbits receiving messages and your Nest firedectors downstairs launching a “mom will be upset alert!”, just because Mom stood on the scale and the results wasn’t pretty. You will have 30 seconds to hide the scrambled eggs and butter croissants and substitute them by fresh fruits and Special K :-)
Without a joke, the devices that you will buy regularly, but whose next-generation can hold many IoT apps will become the key IoT success enablers. Think WiFi routers, NAS, unified conference systems, set top boxes, etc. They might not be the sexiest devices in the world but people buy them in large quantities so IoT app enabling them will assure the IoT revolution to be accelerated…
IT departments are a strange beast. Several years ago they were the most innovative department in most companies. They offered software solutions the business was not prepared for. However cloud, big data, IoT, etc. have accelerated in the last years faster than most in-house IT departments could handle. Some IT departments have more focused on putting processes in place to avoid talking to end-users than to actually helping the business compete faster and better. So how do you know if you are dealing with an IT dinosaur department or not?
1) speed of simple routine tasks
How fast can an IT department do simple tasks, e.g. open a firewall port, correct a misspelling on a website, add a user, add a subdomain, etc. If yours can turn around these tasks via automated solutions in minutes, you are top class. In hours, you are fine. However when we start talking about weeks or months then you definitely have an IT dinosaur department.
2) willingness to help the business
If your business has a problem, do you go to your IT department to ask for help on how IT might solve the problem and give the company a strategic advantage? Or on the contrary, the business has no other choice then to bring their own devices, use corporate credit cards to buy cloud resources, use external consultants, etc. because the last department that will listen to them is the IT department? Years of IT cost optimisations have pushed innovation out of some IT departments. If this sounds like yours: “IT dinosaur department”.
3) attitute towards change
The world is innovating so fast that any business that wants to be competitive needs to embrace change. This means that waterfall methodologies no longer work. Lean, scrum, minimum valuable product, continuous deployment, etc., call it whatever you like. The reality is that if your attitude is that whatever you decide today will need to be changed tomorrow, you are doing the right thing. Few businesses can afford to make a five year IT plan any more. When the ink dries, it will be outdated. In a world were HP, Dell, IBM, Accenture, etc. need to reinvent themselves continuously or risk dying, what do you think will happen to other sectors? One mobile app like Uber, can create global chaos in an over-regulated sector like the taxi sector. There are too many sectors that have not been innovating and risk being disrupted, e.g. telecom, energy, logistics, financial services, retail, etc. If there is no attitude to embrace change, then you are at risk of becoming or already have become an IT dinosaur.
What is a dinovator?
A dinovator is a person that accepts that they work for or are at risk of becoming an IT dinosaur but don’t accept this reality. A dinovator will look for unproven, non-standard, and often risky technology solutions to apply to the current business challenges and will via prototypes demonstrate to others that there is a better future. A dinovator will not try to make slides and convince others. They know that some people still don’t have a smart phone and will probably never change their mind. A dinovator makes sure that others understand how cutting-edge technologies can give a company a unique advantage. Seeing is believing. If you would live in 1802, would you belief that one day the world would be jammed with cars, planes and smart phones? You would not. You would call a fool to anybody trying to convince you otherwise. However if somebody would show a prototype of a car to you, then you would have to belief that horses are not the only means of transportation. Only over time will you realise that traffic jams and F1 will be possible. But at least you stopped believing that horses will continue to have a monopoly. The world needs dinovators to show this message to telecoms, energy companies, transport companies, banks and insurers, super market chains, etc.
Everybody can be a dinovator
You don’t need to be technical to be a dinovator. If you are in a business position, just asking smaller or alternative suppliers to show different more innovative approaches will also work. Telecom operators have during years asked their suppliers to give them faster and cheaper networks. They did not ask with the same intensity for new revenue generating solutions. The end result is that their regular suppliers have been focusing all their energy on what the customer asked. If a customer does not ask for it, then a “well managed company” will not dedicate resources to it. It is the typical innovator’s dilemma. The end result is that the industry is shrinking and once super companies have no other choice then to consolidate and fire employees, e.g. Nokia just bought Alcatel Lucent. You have a choice. Either you wait for others to make your job irrelevant or you become a dinovator. If you are good at being a dinovator then pretty soon you will be able to call yourself and your company an innovator. Being an innovator is an attitude. So join the dinovator movement, tweet your dinovations to the world and include #dinovator @telruptive.
Today’s networks are mainly based on hardware acceleration of a limited set of low-level routing rules. This was perfect in a well established world of a limited set of well known protocols traveling mainly from servers to clients. The new reality is that software has become elastic, data has grown big, Internet of Things clients are growing exponentially & are very chatty, streaming 4K video will be the norm, etc. Networks now need to become software defined if they want to survive this new reality.
Is SDN on top of private cloud the solution?
The answer is only partially. There are just too many data plane heavy use cases that still need hardware acceleration in the short term. Too many networking software is not ready for scale out and too many layers of hypervisors and other complex abstractions make current solutions too slow.
The solution is divide and conquer. Just like transactional database are still around after a wave of NoSQL, NewSQL, streaming analytics, graph databases, etc. So will next-generation networking need a mix of best in breed virtualized and appliance-based solutions to each problem.
Networking White Boxes or SDNA
Software defined networking appliances will be the first big innovation in 2015 to be adopted at scale. These boxes combine network acceleration with software-defined networking applications. In the beginning this will mean that standard networking ASICs can be reprogrammed in more dynamic ways. Good examples are the Facebook Wedge and Six Pack. This is however just the start. Expect multi-core processors that can handle many ports at the same time or new versions of ASICs and FPGAs that are more optimised for SDN logic.
Just like IT and Cloud got a big Devops boost through orchestration tooling, so will network orchestration tools allow for virtualized SDNs and physical SDNA to be orchestrated seamlessly. These will likely be additions to existing devop and orchestration tools instead of a new set of tools.
Software Define Radio
Instead of using cables and broadband solutions which are expensive to install, expect the next generation of software define radio to allow for end-devices to communicate with their peers and hubs a lot more freely, optimised and ad-hoc. This means that the next-generation of networking needs to take into account a reality of wired and wireless. Also expect protocols to evolve. With software defined radio it will be possible that new wireless standards emerge from small projects on Github that become overnight successes. Yaml, Json, Node.js, WebRTC, etc. were not born in a standardisation group. They became standards through usage. Expect the next generation of networking protocols to come from small super smart startups.
Networking Apps & App Stores
At the moment you buy an appliance that comes with an embedded operating system and a set of pre-installed networking logic. At most you can install plugins. The near future will see networking apps be sold via networking app stores on SDNA from a third-party. Expect new networking startups to become overnight successes because they no longer need to ship atoms worldwide, they just need to upload bits to an app store.
Reshuffling of the networking and telecom market
With software, operating system and hardware being separated, the old networking industry rules get rewritten. It used to be enough to be good at 2 or at least 1 out of three. Excellent hardware, an ok operating system and some good software was enough to be market leader. Now no longer. Best-in-class can be easily obtained in each category. The problem will be when revenue streams come from software maintenance but the supplier actually was only excellent in hardware. These suppliers will see their revenue disappear overnight when others start winning the networking software battle. Expect also the networking services business to change. If hardware, operating system and many networking apps substitute the single vendor approach then very likely IT system integrators will have a better shot at dominating the services market then traditional network vendors. Networking will have become more like IT. Even telecom networking. So IT system integrators have everything to win by accelerating this trend.
Expect many new technologies and business changes that will make new winners and old losers in the next 24 months. My money is on the network software innovators to come out winning…
Summary: Help companies with dinosaur IT systems survive the ice age of innovation. Become a Dinovator…
Before reading this blog post, you should have read: how the cheapest X86 became the smartest switch on MWC, how the cheapest X86 can solve the 4 biggest telecom industry problems and the telco innovator’s den.
If you thought that we were waiting by the phone to get calls from telecom CEOs for the telco innovator’s den then you don’t know us. From the start, we did not think they were going to call. However we were surprised that one of the top 10 telecom CEOs actually got our blog post, read it and considered calling. This is a clear signal that our base message: “The telecom sector needs to innovate or things will get messy” was spot on. There are three things that sell in this world: sex, gossip and controversy. If you want to deliver a message to a large audience that does not want to listen, pick at least one as your theme and build a guerrilla marketing campaign around it.
If you think that we are now organising the Bitpipe Accelerator Den, then you are also wrong. Yes we would be able to assist in supplanting inefficient telecoms with efficient Google Mobile and Fiber. However would that serve a lot of people? Do you really want lawyers to start calling you with offers to help you with your divorce because Google detected that your partner is looking into it but hasn’t told you yet? Do we really want to see large 300.000 employees companies reduced to 3000 because they are now bit pipes? Telecom downsizing is not pleasant. So please if you are working in the telecom industry, or in any industry that is the victim of disruptive innovations, then please keep on reading and become a Dinovator…
Dinovators are people that wake up one morning and find that the company in which they have been working for many years has been converted into an IT dinosaur. Not because the employees have been doing something wrong but because the outside world just went too fast and out innovated them. You now have two options: 1) Jump ship 2) Show dinosaurs how to innovate. If you are a Dinovator you prefer option two.
So how can you innovate in a traditionally minded company? You can go and show slides. You can go and tell everybody that the wolf is coming. However we tried those approaches years ago and you will fail. Majorities and laggards don’t want the status quo to change because they have a vested interest in it and they don’t know if they will have so in the new reality.
What works however is seeing magic with your own eyes. Anybody that has seen and touched the future can’t deny it any more. Now how can you show the future to people? First of all you need to understand their problems. If in the telecom industry the problem is revenue generation, then don’t go and show them a new proposal for a better protocol or faster network. Show them how new revenue can be generated, churn reduced, cost reduced, OTT revenue generated, etc.
So if you are technical then you can use the cheapest X86 server with 6 ports or any other device you can get your hands on and put an open source operating system like Snappy Ubuntu Core and you can create some Snappy Apps to show that there is a better future and can convert it into the smartest switch that solves the 4 biggest telecom industry problems. You can use the open source Juju charms and some cloud to show how complex telecom software can be abstracted and how for instance an open source SMSC can have a rest API with three parameters [to, from & message] and still deliver the same SMS service as that very expensive box that has all types of SMPP and other useless APIs and takes months to integrate with. If you are in financial services, retail, logistics, industrial, energy, etc. then you can probably find some other cheap box that can be Snappyfied or open source software that can be charmed so you can show your magic.
If you are not technical but have access to suppliers then you just ask them to surprise you with what they can come up with if they would apply disruptive innovations like Snappy and Juju. If you promise them that you will arrange a meeting with the boss of your boss if they surprise you, then they will be happy and surprise you for sure.
However to accelerate “dinovation” and to be inspired with what a community of dinovators can do, our proposal is to use Twitter. Just tweet a 1 minute video or a short blog post about your “dinovation” and include #dinovator and @telruptive. If you see tweets with great “dinovations” then you retweet them and share them with colleagues, customers, partners and bosses. This way you can become part of the the Dinovator Movement. The Dinovator Movement is not accepting that companies that have been around for many years are useless and need to be substituted. The Dinovator Movement is about showing that even in the most traditional companies there are Dinovators at work that show how that company needs to adapt to the new reality. The Dinovators explain to management that what is needed is Innovator’s Dens in which partners, customers, suppliers, etc. are invited to participate and innovation can be accelerated without RFPs and wasting everybody’s time. A Dinovator wants their company to embrace the new reality and thrive on it. Open Source has made becoming a Dinovator super easy. Nobody will put a critical system in production without paid support so even business people will be happy with open source Dinovations. However open source has a magical power, it does not get stopped by RFPs. So use its power. Have a Dinovator Day…
Dear Daniel Mead (Verizon), Li Yue (China Mobile), Randall Stephenson (AT&T), Vittorio Colao (Vodafone), Masayoshi Son (Softbank), Cesar Alierta (Telefonica), Timotheus Höttges (DT), Carlos Slim (America Movil), Hiroo Unoura (NTT), David Thodey (Telstra), etc.
Only 5 of you will be able to see the most disruptive telecom innovations in the world. Innovations that will solve your 4 biggest problems ($B new revenue, zero churn, costs/10, OTT revenue) and can be in production in 2016 if you want them to. If you are not interested in seeing them, no problem:
Dear Xaviel Niel (Free.fr), Mister/Miss Google MVNO (whoever you are),
In October we will organise an event. If the previously mentioned individuals are interested in solving their 4 biggest industry problems, then you are invited for free to join and see their industry’s biggest innovations. In case they roll them out too slow then you can show them how it is done. If for some strange reason they are not interested, then you are still welcome because we just change the topic of the meeting from telecom innovators den to bitpipe accelerator den and you will be in company of some of the most famous venture capitalists. We will keep you posted on the interest of the telecom CEOs…
Dear telecom investors,
You seem to be the only one telecom CEOs listen to nowadays. After all these years, the telecom industry has not been able to get right even their dumbest service, i.e. voicemail [please let me know if you love using it and I will apologies to you]. Personally I invented in 2010 already solutions to create personalised value added services on the cloud. The same week the solution won one of the industry’s most important innovation awards, one of their biggest suppliers (the company I worked for) pulled investment because telecom operators were not interested in revenue generating solutions for consumers. Telecom only wanted faster 4G back than.
Fast forward to 2015. Telecom operators are enjoying putting up more data pipes and buying more spectrum so Youtube and Netflix can fill them up immediately without given operators any revenue. Call and SMS revenues are disappearing fast. They haven’t got any new revenue generator lined up. They have a data tsunami in the form of Internet of Things waiting to destruct their networks, and it is coming in the next 2-3 years. They are investing their marketing budget in launching “innovative” tariff plans. Their IT departments are spending billions on obsolete Oracle, VMWare and Redhat technologies. Their internal processes are crippling any progress. Their procurement processes mean in practice that you have to wine and dine middle management during 18 months, educate them on your innovations, help them write an RFP so all your competitors can now start undercutting you on price and add useless features to score more points. We have never seen an RFP that asked the right questions like: [score from 0 to 10], will this solution bring new revenue, will it reduce churn, is the solution easy to use, integrate and scale, etc. Any Silicon Valley startup that mentions to a VC that they want to work together with telecom operators looses any chance of funding immediately.
We are an open source company so anybody can download and use our solutions. We recently brought a phone to market. Five years behind anybody else but it still became front page news on their biggest event of the year. Our cloud team was able to demonstrate how in minutes anybody can deploy, integrate and auto-scale a working mobile network with open source mobile phones, open source base stations and all open source back-office solutions. We are not an unknown company. Our operating system powers around 70% of the workloads on the biggest public cloud and 63% of the OpenStack private clouds most of them are now slowly migrating to. We can set up in hours private clouds with the software defined networking solutions of any of their suppliers and have network function virtualization orchestration working unlike their regular suppliers that only do slideware. We don’t like to go and waste our time on their standardization groups because lately none of their non-networking standards had any traction. We rather prefer to give them working solutions for their real problems. We power the biggest super computer in the world. We are the default desktop for Google programmers. We are the only company that has a solution to deploy, integrate and scale telecom solutions in two clicks and we made it available as open source. Please try it yourself. The most amazing thing is that we were able in two weeks with a very small team to convert the cheapest Intel server with 6 ports we bought on Amazon into the smartest switch of MWC that can solve their four biggest industry problems.
We have access to the best technologies and most innovative partners in the world. We are willing to train their brightest employees and show them how to solve their 4 biggest industry problems in a unique telecom innovator’s den in October where they will be able to decide if they want the technology to be in production in 2016. However what we don’t have is a big sales force that can wine and dine them. Patience to wait for their RFPs. So if you think they should take our offer, please instruct them to bid for one of the 5 telecom groups we have seats for. We can’t help all 900 of them because we are only 700 employees. We are not doing this for money because if they start putting crazy high bids then we will use the extra money to seed several of the innovative open source telecom startups that can help their industry.
If you think this situation is completely ridiculous and you don’t want to loose your hard earned money, I suggest you give them about a week to read this blog post. You probably want to forward it to them, in case they mist it. If by then you don’t see another blog post about how happy we are that the telecom industry is ready to embrace open source, my suggestion is that you sell your telecom stock while you still can. Our bitpipe accelerator den will not care about their stock market performance and probably so should you in that case…
EDITED: Read what happened next.
1. Block chain
The block chain is the heart of digital currencies like Bitcoin. What most don’t realise yet is that the block chain will be used for managing everything from domain names, artist royalties, escrow contracts, auctions, lotteries, etc. You can do away with middlemen whose only reason of being is making sure they keep on getting a large cut in the value chain. Unless a middlemen or governmental institution adds real value, they are in danger of being block chained into the past.
2. Biometric security
A good example is the Nymi, a wearable that listens to your unique heart beat patterns and creates a unique identity. Even if people steal your Nymi, it is of no use since they need your heart to go with it.
3. Deep belief networks
Deep belief networks are the reason why Google’s voice recognition is surprisingly accurate, Facebook can tag photos automagically, self-driven cars, etc.
4. Smart labels
They are 1 to 3 millimetres small. They harvest electricity from their environment. They can detect people approaching within half a metre, sometimes even identify them and each product you will buy. Your microwave will not longer have to be told how to warm up a frozen meal.
A $35 Raspberry Pi 2 or Odroid is many multiples more powerful than the first Google server but the size of a credit card. Parallella is $99, same size, and almost ten times more coresP then the first Google server.
6. Apps and App Stores for Smart Devices
Snappy Ubuntu Core allows developers to create apps like mobile apps but to put them on any smart device from robots & drones to wifi, hubs, industrial gateways, switches, dishwashers, sprinkler controls, etc. Software developers will be able to innovate faster and hardware can be totally repurposed in seconds. A switch can become a robot controller.
7. Edge/proximity/fog clouds
Public clouds often have too much latency for certain use cases. Often connectivity loss is not tolerable. Think about security cameras. In a world where 4K quality IP cameras will become extremely cheap, you want machine learning imagine recognition to be done locally and not on the other side of the world.
8. Containers and micro-services orchestration
Docker is not new but orchestrating millions of containers and handling super small micro services is still on the bleeding edge.
9. Cheap personalised robots and drones
£35 buys you a robot arm in Maplin in the UK. Not really useful for major things except for educating the next generation robot makers. Robots and drones will have apps (point 6) for which personalised robots and drones are happening this year.
10. Smart watches and hubs
Smart hubs know who is in the house, where they are (if you wear a phone, health wearable or smart watch), what their physical state is (heartbeat via smart watch), what your face looks like and your voice. Your smart watch will know more about you then you want relatives to know. Today Google knows a husband is getting a divorce before they do [wife searches and uses google maps]. Tomorrow your smart watch will know you are going to have a divorce before you do [heart jumped when you looked at that girl, her heartbeat went wild when you came closer].