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Showing posts from August, 2011

The verticalized enterprise stack: why HP needs to merge with SAP

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This post was also published in VentureBeat. HP has had to face tough realities this week. Fortunately, there is a way for it to survive: Embrace the inevitable trend favoring “vertical” companies.

In the first part of the 2000s, IBM and HP went in two vastly different directions: HP acquired Compaq to bolster a horizontally-integrated PC business, while IBM sold its PC division to Lenovo and focused on creating a vertical stack of enterprise products.

In the early 2010s, HP’s decision to attempt to dominate PCs has come back to haunt it. Even though HP is the number one PC seller, the low-margin business doesn’t pay, so the company is exiting both the desktop and mobile consumer computer business.

Now HP needs to act fast to remain competitive in the enterprise.

Rule of three
Earlier I described how the consumer computing business is consolidating based on the “rule of three” economic theory and that three big players would dominate the industry: Apple, Google and Microsoft. To p…

Good morning, would you like an Apple, Google or Microsoft?

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This post was also published in VentureBeat. While it comes as a big surprise that Google is buying Motorola Mobility, it is just as surprising that Apple launched a cloud service that will eventually fully compete with Google’s services and Microsoft essentially turned Nokia into its own private Foxconn and will compete with Apple’s devices.

All of these moves actually fit economic theory perfectly: Personal computing is now pervasive throughout our society, and the 30-year-old industry is maturing into a “rule of three” phase, where three large players will dominate the industry: Apple, Google and Microsoft are the GM, Ford and Chrysler of our era.



Each of these “big three” players needs to build a full vertical stack and extract efficiencies between and from each layer: mobile operating systems, mobile devices, desktop operating systems, personal computers, web browsers, productivity applications, content distribution and cloud services. Now we know why Apple needs Safari, iWork a…

Why Time Warner should reacquire Aol

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This post was also published in VentureBeat. Aol released its earnings today a week after Time Warner, its former dot-com merger partner, announced earnings. The two businesses, once considered completely disparate and deemed one of the worst corporate mergers of all time, are now increasingly complementary as the industry shifts beyond delivery mechanism to content as the value differentiator.

Time Warner reported stellar earnings last week, with income up 14% year over year and strong 11% growth in television networks such as TNT and CNN, 18% growth for premium content such as HBO, and 13% growth for Warner Bros movies.

The one thorn in Time Warner’s side is Time, Inc. — the division grew a moribund 3%. The anemic growth at Time is coming primarily from online revenue, but it is a tough transition since Time does not sit on a premium editorial perch like the New York Times or Wall Street Journal. And although Time is currently profitable, the Time Warner CFO has warned that income …

Just like Google and Facebook, Twitter now Charges Brands to Reach their own Customers

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This post was also published in VentureBeat. You know a web service has reached massive scale when it can charge brands to reach their own customers. Google has been doing it for years, Facebook has been doing it for the past couple of years, and now Twitter has just entered this hallowed territory with its new promoted tweets feature, which lets brands keep their tweets alive in your stream only if you have already followed that brand. The irony here is that you are only seeing these promoted tweets if you already followed that brand – so the brand is paying to advertise to users that already like it.

Now if advertising is usually about getting new customers, why would brands pay to market to their existing customers?

Many years ago, Google had a stroke of genius: to put ads above the search results and then charge brands to own the top spot where the brand inevitably would have been the first result. So when people search for BMW, BMW does not want Mercedes getting the top spot, so…