Orange, Canal+ and Netflix going toe to toe

Sometimes these newsletters virtually write themselves. Other times it’s a struggle because the topic is so big or so complicated that I can only hope to scratch at the surface, doing a poor job at that.

I’ll let you guess which type this one is 😢

On to the update.

China, Venezuela and The Cloud

With the recent kerfuffle between China and the NBA, China and the Trump administration and then Apple (or more precisely the App Store and China), I thought it would be interesting to analyse a little of what is happening and how companies are starting to do rewind years of work entering China.

Firstly, some background. The Houston Rockets General Manager, Daryl Storey, tweeted and quickly deleted, in support of the protests that had been raging in the former British colony of Hong Kong since the proposal for extraditions from Hong Kong to mainland China was introduced.

The fact that the Rockets Chief’s tweet solicited such reaction is due in part to the drafting of Yao Ming in 2002. He’s become a legendary figure in the Houston Rockets and the NBA as a whole. Yao Ming is a Chinese national and has single-handedly popularised the sport in China to the degree that the country boasts more fans of the sport than the home nation, the U.S.A. The NBA additionally marketed itself to the market to take advantage of the opportunity.

The backlash in China meant that pre-season games went played un-televised, a first for China. It had an immediate effect on the advertising and rights revenues of the NBA. Estimates put it at around 500 million Chinese that have watched at least one NBA game last season, that’s many eyes to market products and services.

Cutting a long story short, it became clear that China’s power and influence were starting to have an effect on internal affairs and attitudes within the United States and elsewhere around the globe. Some even called for boycotts of Chinese products, with the affair enabling political heavyweights to dive into condemning the superpower. A Democratic candidate tweeted that the U.S. 

“must lead with our values and speak out for pro-democracy protesters in Hong Kong, and not allow American citizens to be bullied by an authoritarian government.” - Julián Castro:

Apple’s involvement was more pedestrian and garnered criticism only because Apple did something, pulled back, then did something again. All in a short space of time and with a particularly lousy explanation of their indecisiveness. The issue surrounded their denial-approval-denial of an app that was used to help people understand where protests were happening in Hong Kong (see above).

In another example of the difficulty of internationally offering services, Adobe — or more crucially the users of Adobe’s services — fell victim to the U.S. Government’s sanctions in Venezuela. Users suddenly found themselves without access to the Creative Cloud Suite (Photoshop, Lightroom, amongst others) from today. Adobe has offered refunds for services paid for but unconsumed only after an outcry from users that had the rug pulled from underneath them. However, in a blog post earlier this week, Adobe says they have reached an agreement with the U.S. Administration to keep serving its Venezuelan customers, effective immediately.

If you run a business like that the generates a meaningful part of your income, or you rely on services of this nature to get your professional work done, then this is not a comfort at all and has highlighted the risks of the cloud computing model. The wind (read: political) direction can suddenly change, leaving you without revenue or the tools of your trade. That is a business risk that is possibly too much to bear for some. It is the genesis of why some businesses are starting to devise ways of protecting their revenue and even providing better value-add. However, as for any business, adversity is often an opportunity well disguised.

Microsoft’s sovereignty and de-risking problem

If we look at Microsoft and their pivot from selling desktop and server software that was licensed on a perpetual basis — installed on computers and servers located in the companies who signed agreements with Microsoft — to what is basically renting software installed and maintained in Microsoft’s own Datacenters , we see that Microsoft's initial idea revolved around mutualising as much data as possible in one datacenter. The idea obviously, to lower COGS that directly affect profit margin.

Microsoft started with a couple of what it calls regions — datacenter located in a specific geographic location that serves one or more countries locally, think Europe, with Datacenters in London and Dublin serving France, Belgium, Germany, and others —, and has expanded rapidly over the years from market pressure and sovereignty issues. In Europe, Germany was one of the first countries to mandate that data relating to its citizens reside within the confines of the country. Something that forced Microsoft to build out a new region in Germany, for Germans. At great expense, I might add. Other countries followed suit, France, Switzerland and of course, China.

Source: https://azure.microsoft.com/en-us/global-infrastructure/regions/

Not only did this have the effect of complying with the sovereignty requests of some European and Eastern regulations, but it has the added benefit of reducing outage risks when a Datacenter failure only affects the particular region. In the case of Germany, a failure in its region only affects German customers and those who rely on the German Datacenter. Albeit at enormous cost, but a cost that can only be described as the cost of doing business in that region. It also had a side benefit of allowing Microsoft to compete in highly sensitive Government projects tag would otherwise be out of reach for the American multi-national. Look at the recently awarded contract of 10 billion dollars for the Pentagon.

What we also know is that the potential for cloud computing is only just beginning. Potential in terms of what can be done, but the potential in pure market opportunity numbers. The low hanging fruit of the simple workloads has all but migrated to the cloud already — email, basic operations tasks, data warehousing, basic office computing and others. The next big opportunity is moving the integrated and intricate workloads of large and complex ERP systems and creating value by linking them to those already-migrated primary workloads. Microsoft was first in developing the hybrid model when AWS and others were “all-in” on the cloud paving nothing for existing local workloads. Microsoft’s efforts were basic and often complex, but offered the opportunity to not throw the baby out with the bathwater. Now Amazon and Google have understood this and are structuring their businesses to compete in this area.

The foreseeable future looks bright for the cloud business.

CANAL+ and Netflix’s (new) Maitresse

Hot on the heels of the announcement that Netflix had inked a deal to provide its content through (a paid-for extra) Canal+, Orange — the European telecoms giant — announced and advertised that it too could provide Netflix to its customers. The deal was initially signed in 2014, yes five years ago, and was resigned in 2017 to reinforce the offer of programming "originally" created by Netflix and distributed to its worldwide customer base, with particular focus on Europe and Africa.

However, this has just changed, and it seems, in direct response to the Canal+ offering. Previously Orange downplayed the fact they were distributing Netflix Originals, only publicising the program and film titles, now the full Netflix subscription is available directly on the set-top box. Nothing new and extraordinary for Netflix, as they have been bundling their player software on televisions and set-top boxes for many years. What is interesting is that Orange had to react immediately to the Netflix threat (not from Netflix but Canal+) and did so quickly and simply by activating a Netflix player app on their set-top box, which incidentally accepts existing Netflix accounts and subscriptions. Now they too, "have Netflix".

The takeaway from this is that Canal+ thought it was in a stronger position than Netflix when Netflix entered the market through Orange. It was up until that point practically the only distributor of original content (aside from terrestrial television)1, something that differentiated it from Orange and others in the market. It was, however, a miscalculation because people don’t want to see a program or a film because it is from one distributor or another, they want to see great content regardless of where it originates. That is what Netflix already understood, and is reason why Netflix continues to invest in “Original" programming to the tune of a few billion dollars a year. Netflix was always going to have leverage because it is an aggregate and has zero marginal costs relative to Canal+. Boutiques, boxes and after-sales service cost much money; and despite Netflix having increasing COGS, but they are nowhere near what Canal+ would require for the same investments in original content. Canal+ was doomed to open the door to Netflix. It was just a matter of time.

Oh, how disruption makes even the mightiest dance around to the tune of the disrupter, or should I say, Aggregator?

The Future is Digital Newsletter is intended for anyone interesting in learning about Digital Transformation and how it affects their business. I strongly encourage you to forward it to people you feel may be interested. If this email was forwarded to you, I’d love to see you onboard. You can sign up here:

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WeWork’s gaff and the opportunity for LinkedIn

Just released: I was a honoured to be a guest on Kadia Francis’ podcast, The Digital Jamaica Podcast. You can get more details on Kadia’s blog here.

Digitalising meetings and conferences is something that is becoming evermore useful for businesses and individuals alike, I explore a couple of examples here.

On to the update.

Virtual Island Summit

As previously mentioned that I had attended a few sessions of the Virtual Island Summit, and as a general comment, the content was very thought-provoking and very much geared to the context here in the Caribbean. However, despite being relevant to the Caribbean, much of the content drew on ideas and experiences from around the world.

One of the first presentations was entitled Digital Social Innovation To Empower Democracy. The title intrigued me, so I put aside some time to follow the session with a little more attention than I would normally. Several things struck me as attractive from a perspective of Digital Transformation and how they weave with local contexts.

The talk presented by Audrey Tang, who is the Digital Innovation Minister from Taiwan. Which immediately got me thinking about our Islands and territories, and which have specific jobs, ministries and elected officials in that capacity.

Spending, admittedly, a short period researching, there appear to be few positions in local Government dedicated to digital, let alone devoted to topics concerning digital that directly affect the population. Most Ministers and authorities are trying to wrangle digital change in their countries and are leveraging either traditional utilities or education-focused bodies. Some have taken to promoting ICT departments, as they are "digital".

I believe this to be wrong for the reasons I've been discussing in this newsletter for months now. The element that is most important in Digital Transformation is not the "Digital"! This fact couldn't be stated clearly enough in the presentation from Audrey Tang.

Let's go back to the title, Digital Social Innovation To Empower Democracy, and break that down a little.

Democracy is not just your right to vote, or criticise your Government (quite a relevant topic currently based on what is happening in Hong Kong at the moment - avoiding that one for now though!), but it is a means by which all citizens can participate in some way towards the collective benefit of all citizens within their town, region or country.

Some things are small, others are large and have a more significant impact, but they are all crucial for democracy, in that they form part of the whole that shapes Society into what it is. I'm not going to lecture you on whether or not you should vote, but what I would say is that you should at least take some responsibility for the outcomes of your own country based on your participation.

As for Innovation, I've discussed Innovation previously in the context of Digital Transformation:

When we talk of innovation, we tend to think of the finished product, like when the initial iPhone was unveiled. It was a stunning “innovation” and completely trumped what the market at that time had to offer… in some ways. Interestingly, it is best explained by Disruption Theory, by entering a market with less features but doing the JTBD brilliantly, so brilliantly in fact, that it quickly ate up market share to the dismay of all the incumbents in the market at the time.

But innovation isn’t the product, innovation is the process. And, innovation doesn’t have to produce a physical product at the end of the process, it can simply be a better way an organisation works internally, for example something as simple as better stock management in the warehouse. To cut it down to its basics, innovation is any change in a business process, or product/service that adds value. Innovation is similarly, not limited to the development of something new and exciting, it can be an incremental change that produces better outcomes for the organisation. Lastly, innovation is a continuous process. Once you have innovated, the work doesn’t stop there. Remember, the new new becomes the new old very quickly in these times!

Lastly, I think the essential element in the title is Social. Although it goes hand in hand with democracy in this context it was necessary, in my view, to single out this aspect in the sense that what the title actually says is that Taiwan was using digital transformation tools and technologies to help society as a whole, through participative projects, contribute to the development and betterment of the country. And when you listened to some of the projects presented, it is precisely what happened.

Take some time to watch some of the debates and presentations on the YouTube channel; I think you'll find them valuable to your own Digital Transformation. I'll be writing up the others over the coming weeks too.

WeWork’s gaff and the opportunity for LinkedIn

LinkedIn, owned by Microsoft, has announced that its platform is to receive several new features this year, most notably features designed to help recruiting and job seeking. But one features caught my eye as it is a Job To Be Done already filled by several platforms and social networks, that of event planning and organising.

LinkedIn Events, the new tools from LinkedIn, allows users to create and participate in professional events around the globe when it is fully rolled out. Currently, it is on trial in NYC and San Francisco but should be rolling out to more cities around the world in the future, with English speaking countries first. Slated to work similarly to Facebook events, LinkedIn Events is more focused on professionals and associations, focused on helping them organise and plan an event for both local and remote participants using the segmentation tools of the platform, Industry, Company for example.

It comes at a very opportune time, as the giant of the meet up social networks, Meetup, made a strategic error that may cost them their business entirely.

From Forbes:

WeWork-owned Meetup, an app that allows anyone to create and attend events, may start charging some attendees $2 per event, a change that’s already drawing criticism from event organizers who say the pricing model will force them to ditch the app and shut down their groups.

• The policy, introduced as a test for some groups in late September, requires anyone attending a Meetup event to pay $2 when they RSVP. Organizers have the option of covering the cost of each attendee themselves if they don’t want to charge participants.

• Event organizers already pay a membership fee to list their events on Meetup. The policy would also lower that fee to $24 per year from up to $200 per year.

• Meetup is positioning the change as a reduction in costs for organizers, but some say if they choose to cover the $2 themselves, they’ll end up paying more than $240 per year, making the app unaffordable.

• Some groups have upwards of 200 members, and organizers say they don’t want to exclude people who might not be able to afford a fee, especially if that group meets multiple times per week. 

• Meetup users slammed the changes as an effort to squeeze more cash from the app as its owner WeWork faces financial challenges following the cancellation of its IPO. WeWork may also be looking to sell off Meetup altogether.

WeWork subsequently did an about-face, "clarifying" that this was simply a limited-reach test and that no final plans to change the current pricing structure. But this announcement highlights the dangers of digital platforms where, once they become all-powerful from the network effects, they can attempt to dictate the rules of the game. Users were quick to remonstrate, and it was this dissent that promoted a statement from Meetup CEO David Siegel to that effect.

But the damage has been done. And many of Meetup's members are already looking toward other platforms, which is where LinkedIn slots in nicely and in some respects, LinkedIn is a better platform for this type of offer. Not only does the platform have rich information on the professional lives of people, but the value of being seen to participate in the community, regardless what that community is, is increasing as a differentiator to potential employers and a value proposition for prospective employees to display.

The Future is Digital Newsletter is intended for anyone interesting in learning about Digital Transformation and how it affects their business. I strongly encourage you to forward it to people you feel may be interested. If this email was forwarded to you, I’d love to see you onboard. You can sign up here:

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Libra ite domum

I recently attended the OECS’s Virtual Island Summit. I’m currently ploughing my way through the sessions and will be writing about that in the short term. There were a lot of fascinating presentations over the few days, and much is of direct use to us in the Caribbean.

On to the update.

Buses, Data and the Value of Data

The 1st of October witnessed the introduction of a structured and timetabled bus service in the north of the Island of Martinique. The project had been long discussed but had had plenty of difficulties along the way due to structural and operational challenges - read, people!

The North Caribbean coastal and inland towns served by the coastal road had until that point been serviced by taxicos, operating with few restrictions. As a daily user, you were either unconcerned or had no choice but to wait and pay. The taxicos were always late, disorganised and too expensive for the service offered. Safety was secondary; no seat belts, doors that had long past their usable life span, as examples.

I’ve written previously about the state of public transport in the Caribbean and how users are often in a “suck it up” or nothing situation:

When we look at the end users and their relative power in the value chain of the public transportation business, and I'm specifically talking about the Caribbean as I know its not the same in London or New York, we see that they are relatively powerless — essentially they are in a take it or leave it situation. With no powerful central public transportation organisation with a solid offer, users are powerless to exercise pressure upon that organisation in order to obtain better service. With no organisation of users as lobby, they relinquish the right to exercise pressure on abusive pricing of poor to bad services. Yes, they can just choose not to use the buses and Taxicos, but what alternative do they have?

The news of this new service piqued my interest obviously, and particularly as I hoped the service would have digital technologies natively integrated from the get-go.

Remember, Digital Transformation is hard and much harder for companies that have years and sometimes decades of culture built up in the business. Culture is hard to modify and align with new objectives which is why we see Thomas Cook happening.

Thomas Cook is additionally the victim of its decision not to transform into an agile, Internet-savvy business with consequences that run into thousands of job losses around the world and an estimates 150000 British holiday makes stranded unless the UK government can step into charter planes for the rescue, an estimated cost of £100m.

Founded 178 years ago, Thomas Cook is a giant in the tourism industry, with a breakdown of its sales as 67.8% for flights, holidays, accommodation and insurance and 32.2% in airline services. At the end of September 2018, they owned 186 hotels and had a fleet of 100 aircraft. Its sales breakdown is split between the UK at 24% and the rest of Europe at 66% with Germany alone counting for 37.8%.

As you are no doubt acutely aware, the Caribbean is one of the group's leading destinations and many companies in the region are exposed to the risk of Thomas Cook's impending failure.

Thomas Cook failed to seriously take its business in the direction of digital, instead strategically opting to open and run 563 high-street sales shops, financing much of the expansion in debt that was in-part attractive due to historically low-interest rates in Europe, but servicing that debt, now at around £1.7bn, is expensive, even if it is relatively low, running at around £150m/year.

While the world was transforming digitally, Thomas Cook took the opposite route and is now paying the price with an impending doom unless they can finance their way out of the current hole.

When you are a nascent enterprise, you have a responsibility to build in digital services as a default, not an afterthought. Why? Because it is going to be harder, more expensive and take a lot longer to retrofit digital into your operations if you don’t do from the outset.

I’m disappointed to learn that Martinique Transport (the body set up to operate public transport in Martinique) have no such digital technologies in view.

A pdf timetable exists on the website, but some of the most basic technologies that are available on the market for over 20 years are not present. You can’t see when the next bus is arriving (there’s no indication of time to the next bus), there’s no app you can use to look up the routes, timetables and bus times. You go to the stop, and you wait. When the bus arrives, you get on comforted by the fact that at least it’s a regular schedule compared to the previous service.

Anecdotally, I’ve noticed more people at bus stops that ever before, so the service is having an impact on mobility, and as I mentioned in my interview with Greggar Deterville of RIDE Caribbean:

One thing is for sure, mobility provides fuel for growth in an economy, the more we can do to make that easier, more efficient and cheaper, the better it is for the country.

Besides this, implementing these services could have benefits for Martinique Transport as well. I’m talking about Martinique Transport specifically, but the same argument can be applied across the Caribbean, so I hope you don’t feel I’m targeting them intentionally.

In implementing digital services, each bus would need a device that reports back in near-realtime their location. At the datacenter, that report would then be integrated into the database and rationalised as required. Data rationalisation is the process by which the data collected is audited for inconsistencies, duplicates and potential errors, treated and committed to the database in its final form. This data is then exploitable by anyone wishing to use it for other purposes. And a few seconds delay on the location of a bus is not particularly significant.

The database then becomes the basis for the development of simple tools that are valuable to Martinique Transport and possibly open up the potential for monetisation.

An app for Android and iOS wouldn’t necessarily have to be developed by Martinique Transport; it could be independent with Martinique Transport charging a reasonable annual fee for access to the database via simple APIs. That would promote third parties to develop apps, a few rivals competing to provide a unique take on presentation and usability would be a healthy thing, and Martinique Transport would benefit from simultaneous revenue from the developers.

The devices required on the buses have a cost, it is non-neglige, but a simple prototype solution would be very cheap to implement. What do we all carry that has GPS builtin and an always-on data connection? The Smartphone!

Give a couple of drivers a cheap android smartphone with a data plan, lock the phone down to prevent abuse and ensure that the GPS application is fired up and reporting back through the APIs. This quick and dirty solution would, in a short period, prove the value of collecting that data, because not only would that data be valuable for users of the services, but Martinique Transport itself could benefit.

Data, as I’ve written before, is crucial for business in Digital Transformation and that we’re often data-rich but usage sparse:

Data is the new oil in the digital economy

Although there is some dispute in the reality of the phrase, with some reasoning that it’s not, the phrase holds true for many businesses looking towards digital transformation. Businesses produce data all the time, but it is mostly lost, stored but not accessed or downright under-exploited. We are data-rich but analysis-poor, and it’s to our detriment.

Once collected and aggregated the data would provide insights for Martinique Transport about the efficacy of the timetable, provide information to help tweak the schedule. Adding user numbers would afford a more meticulous analysis of the appropriate bus types to use on the various lines (peaks and troughs in usage, for example). A plethora of value is available if the data is there.

I hope I’m wrong and that this is in progress already throughout the Caribbean.

Libra eunt domus(1)

In an ever-crumbling house of cards that it Facebook’s Libra project, not only has LINKPaypal publicly pulled out, but yesterday saw the announcements from eBay, Stripe, Mastercard and Visa that they will no longer be part of the project.

Remember, Marc Zuckerberg is set to testify on the 23rd of October to the House Financial Services Committee in a hearing set up to investigate the project and its implications to financial stability.

It is looking increasingly likely that Libra is to become a cryptocurrency just like Bitcoin and the others, albeit famous and very popular.

The Future is Digital Newsletter is intended for anyone interesting in learning about Digital Transformation and how it affects their business. I strongly encourage you to forward it to people you feel may be interested. If this email was forwarded to you, I’d love to see you onboard. You can sign up here:

Sign up now

Visit the website to read all my articles and continue the discussion in the Slack group.

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––––––––––––––––––––––––––––––––

1 https://en.wikipedia.org/wiki/Romani_ite_domum

Why we’re unlikely to see it in the Caribbean anytime soon

I’ve had a bit of eye strain recently, and decided to rest my eyes a little which is why this email comes out only now. Appointment with eye doctor duly booked!

On to the article.

As the victim of a pretty violent road traffic accident earlier this year — one that could easily have killed us — I am very attentive to road security and the way that technology improves it. The world of autonomous vehicles fits squarely with that and the theme of this newsletter: digital technologies and their impact on lives and business.

Today’s title gives the conclusion away far too early, but I thought it worth writing an issue on the subject.

What is vehicle autonomy? It’s complicated

When we talk about humans, often related to the subject of children or those with handicaps, autonomy is a relatively simple concept to assess; can my son wake up and then go for a shower without any other intervention (I’ll not talk about the teenage years that seem to affect autonomous capacity severely 🤷‍♂️), or can a physically impaired person live and work autonomously such that it affords them freedom to control meaningful outcomes.

When we discuss autonomous vehicles, we’re talking about a much simpler autonomy. Tell the car where we’d like to go then start the engine. Very simple, nothing at all like the scale of processing required for a human to be autonomous, yet it seems like science fiction currently.

At the start of the year, CES in Las Vegas has become an institution for technology enthusiasts to glimpse “the future”. Much of what is on-show is pure fantasy and at best, half-baked prototypes putting on the glams to get funded into reality. Notwithstanding, one such demo that was highly entertaining, if still a little too scripted for my liking, was the Yandex autonomous car driving on real roads, in real traffic. It shuttled real passengers around the Strip expertly. This video shows it better than I could explain.

You’ve no doubt noticed the safety driver in the passenger seat and the big red panic button, but it was, nonetheless very impressive.

The 5 Levels of Autonomy

You’ve no doubt noticed the safety driver in the passenger seat and the big red panic button near the hand, but it was nonetheless quite impressive.

The 5 Levels of Autonomy

In 2013, the US Department of Transportation's National Highway Traffic Safety Administration (NHTSA) defined what has subsequently become accepted as the definitive list of vehicle autonomy levels. It ranges from 0 (none) to 5 (full autonomy).

Level 0: This one is simple, and it is virtually every vehicle produced and sold since Henry Ford’s Model T first rolled off his now infamous production line. The car controls nothing, nothing! The engine, brakes, steering, gears and all the accessories like lights and indicators are all human-driven, decided and executed.

Level 1: Level 1 is described best as driver-assistance. Some functions, such as breaking, speed regulation, are controlled under supervision by the bag of meat in the driver's seat: nothing fancy, just a few helpful gadgets to make life on the highway a little more bearable.

Level 2: At this level, at least one driver-assist system controls the experience. It could be acceleration or breaking. However, the critical aspect is that the car makes the decision based upon its understanding and awareness of its environment. The driver is “disengaged” from operating the vehicle, using the NHTSA terminology. If you’ve used lane-assist in a car, this is what Level 2 autonomy is.

Level 3: This is the level at which responsibility for safety rests in the hands of the vehicle and not the human, but only under certain circumstances. The driver must remain aware and capable of capturing full control at a moments notice. This level is what the latest Tesla cars can do on major highways in the US. Many people believe we are likely to skip this step, precisely because this blurring of responsibility between human and machine is already creating more problems than it solves, and judging by the YouTube videos I saw researching this article, that’s not unreasonable!

Level 4: Level 4 is, for all intents and purposes, fully autonomous, in that the vehicle can fully control the trip from start to finish with no human intervention. Under the level 4 definition, however, it is limited to full autonomy under the ODD, the Operational Design Domain. It refers to the fact that in some situations, the vehicle fails in autonomy when operated outside those parameters — for example, driving in a massive snowstorm or rain deluge. This issue becomes important when we look at the situation in the Caribbean.

Level 5: If the vehicle is indistinguishable from, or better than, human drivers, then Level 5 is attained. The vehicle becomes Driverless. Note that Autonomous is now Driverless!

What are the problems for the Caribbean?

Sadly for us here in the Caribbean, the reality is that too many issues exist on our roads for autonomy to be a significant prospect for the foreseeable future. A few examples serve to highlight this.

Take, for example, the weather. Blessed as we are with all-year-round sunshine and warmth, we are bathed with heavy rain (seemingly from nowhere at times), that often floods roads within minutes. For you, the human, much information is inputted and processed; you intrinsically understand the flooding of the road and slowing down is necessary to avert an accident. You see the rain, you know it’s raining. You know the road, you can no longer see the tarmac or concrete, you see lots of water.

LIDAR and other technologies currently in autonomous vehicles are sadly lacking in this perception and intelligence.

I was lucky enough to have a VW Golf for a couple of years that featured lane-assist, but our islands are small, and our roads are even smaller. The technology just wasn’t built for those scenarios. Few are the multi-lane straight-lined highways that allow this technology to work well. Our roads twist and turn, undulating more like the opening sequence to Ridge Racer than the perfect Autobahnen of Germany, forcing operation outside the ODD, resulting in the disabling of the feature after a few hundred metres or so, of poorly lined tarmac.

The technology is coming, but it takes a long time before becoming useful in the Caribbean and universally. Getting the technology to Level 4 in Los Angeles is a very different prospect than getting it to Level 4 in Dominica!

Paypal is no longer pals with Libra

Paypal, one of the 28 founding members of the association pledging $10 million in investment, have announced they are walking away from the project after much backlash had been felt around the globe. In France and Germany, governments have openly stated that Libra would be forbidden in those territories as it is seen as a threat to sovereignty.

I’ll keep beating the drum, it’s annoying I know, but Cryptocurrencies are condemned to remain as a reasonably anonymous (although not 100%) way for you buying your drugs and other illicit goods. Unless they legitimise themselves and are governed and regulated, and most importantly, protected by laws in each state in which they operate, they will remain marginal in both senses of the word. From Blockchain ≠ Cryptocurrency:

I’m an on-the-record sceptic of Bitcoin and other Cryptocurrencies, and so far, nothing I’ve seen has led me to believe differently. They are almost all, a waste of money. They are all, without exception, a huge waste of energy in a time when economising energy should be a priority not just for governments but individuals alike, and at the very worst end of the scale, some are downright fraudulent. That being said, the underlying technology of these currencies is actually quite interesting and has place for use in Digital Transformation

Visa, MasterCard and Stripe are all said to be getting cold feet and are feeling the adverse effects of being associated with Facebook, and it is only a matter of time before they pull the plug too. However, Paypal’s decision also has business strategy wrapped up in it.

Paypal is the owner of Venmo, a digital wallet-type app and a whole ecosystem of payment tools that would, it seems, compete with Calibra, the Libra-based wallet. I’m guessing Paypal took stock of the risk (being linked to Facebook’s negativity) and the potential for being squeezed (see Stories, a shameful ripoff from Snapchat, designed to elevate Instagram at the expense of Snap that worked incredibly well) and said that it just isn’t worth it.

The Future is Digital Newsletter is intended for anyone interesting in learning about Digital Technologies and how they affect business. I strongly encourage you to forward it to people you feel may be interested. If this email was forwarded to you, I’d love to see you onboard. You can sign up here:

Sign up now

Visit the website to read all my articles and continue the discussion in the Slack group.

Thanks for being a supporter, have a great day.

What is a Digital-Native Company and Netflix & Canal+ Follow-up

In a rare and record-breaking event, Hurricane Lorenzo is the first Hurricane in recorded history to be as strong at such a Northern Latitude. Threatening parts of Ireland, the UK and possibly even mainland Europe, Lorenzo is not likely to remain a hurricane, but it is to bring much disruption to those areas in the next few days. Think The Great Storm of 1987. Stay safe.

Lorenzo is almost certainly one of the many side effects of global warming and is a subject I’m currently researching, especially the link between digital technologies, power and CO2 output. I’ve not finished… but it ain’t looking too good for Cryptocurrencies! 🏭

On to the news.

What is a Digital-Native Company?

I asked myself a fundamental question:

Can digital-native organisations do Digital Transformation?

I ask this question as it seems that the ultimate aim of Digital Transformation is to drive organisations to become digitally native.

In answering that question, I need to define what a digital-native organisation is. My attempt is the following:

A digital-native company is an organisation that extensively uses digital technologies throughout the entire value chain, from supply, design and development, innovation to distribution and marketing to the ultimate end of life of its products and services.

Looking at one extreme, a trader in a local market, we can reasonably conclude that the trader is unlikely to be digitally native. Sourcing and the supply chain are handled manually, often by getting into the van and driving around the various suppliers to purchase and collect goods. Stock handling too is a manual exercise when a storeroom/warehouse is involved; zero stock is not always possible at the end of trading. 

Marketing, if any, is additionally more of a human to human communication process, most often done in the form of handwriting today’s prices on a chalkboard propped up by a fruit box somewhere visible for passers-by. Selling too is unlikely digital as so many cash-based businesses are.

Distribution and delivery are also a manual process handed off to the buyer; it is his or her responsibility and charge to receive, check and transport the goods to their ultimate destination.

On the other extreme, if we look at a company like Microsoft, we could conclude that the fact that Microsoft was and is primarily a software development business selling digital goods that are distributed almost entirely by digital methods, it is therefore by definition a digital-native organisation. Microsoft’s products are by nature almost all digital, with some hardware mixed in, Xbox, Surface amongst others.

Most structures fit somewhere in between these two extremes. They have mostly implemented some digital tools to help in productivity, or for the financial management of the company, however consideration about the entire value chain and where digitising is helpful is not something that systematically performed.

What we all see is that there is much scope for non-digital native organisations to introduce digital transformation as a process to improve outcomes.

If we look at the previously cited local market trader, the opportunity to develop digitally is there — many potentialities to improve results to his or her bottom line. For example, the deployment of an internet-connected payment terminal linked to a cloud-based accounting SaaS app would allow the trader to spend less time in data-entry in the accounts system, which would likely be a significant gain in productivity. Not only are the gains visible in the prominent areas, but access to detailed data about sales might reveal, with some simple statistical analysis, facts about the buying patterns of clients’. Possibilities such as allowing the trader to manage stock levels and stock age may allow adjusting for seasonal or event-based peaks and troughs in sales. Waste management can be better accounted for and hence, healthily managed. We should all strive for that!

Microsoft itself is not immune to this tendency either. Since Satya Nadella took the helm of the company, he has implemented sweeping changes in the internal organisation emphasising the importance of Digital Transformation in what is mostly a digital organisation already. 

However, as I’ve highlighted before, Digital Transformation is not just about installing a new accounting system and saying you’re now digital. It’s about changing the culture of the entire organisation to think about productivity and the value chain from a perspective that allows the use of digital technologies in more innovative ways, solving for the jobs to be done, if you will.

Canal+ and Netflix follow-up

Following on from an agreement between Netflix and Canal+ to allow the latter to distribute the former’s content digitally, Canal+ is going all out with a massive over-the-air publicity campaign cycling many times per hour on its properties.

It is a tacit admission that the Netflix model is the one that is winning in the battle for eyes in France and Europe, Canal+’s new advertising campaign quite literally says:

“Canal+. Ca se regard comme <BLEEP>.”

Alternatively, in English:

“Canal+. You can watch it like <BLEEP>.”

If you hadn’t guessed, BLEEP is substituted to avoid saying “Netflix”. No attempt is made to hide the lips, so lipreading such a renowned brand name is child's play.

To me, the strategy is likely to ultimately devalue the Canal+ brand and possibly even contribute to a substantial demise forcing Canal+ into a content-production-only firm — it is very good at that too. Moreover, to make matters more complicated, presumably, the contract allows Netflix to stream Canal+ content!

Why would you pay (more) for Canal+ over an antiquated system that is only just getting to grips with the job to be done, whereas directly through Netflix you’ll be able to get the same content, assuming the bilateral agreement is accurate.

Remember, Canal+ is only offering a Netflix Standard Subscription bundled, which is limited to 2 devices simultaneously and HD streaming. Netflix offers more screens but also higher definitions for those cinephiles amongst us.

Microsoft’s October Hardware Event

At 10 am ET, Microsoft is set to announce a slew of updates to its hardware line mostly offered under the Surface branding. We already know a lot of what is going to be announced — with an unsurprising leap to CPU designs other than Intel’s — but there are still some unknowns. I am especially looking forward to their Digital Transformation story and how the new generation of devices helps businesses and individuals develop digitally. I may comment on what happened in a future newsletter, we’ll see.

In circling back to the initial question, — can a digital-native do Digital Transformation? — if it is not apparent to you now, the most critical part of Digital Transformation is not “Digital”; it’s Transformation…

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