Does Facebook really have a future?
Would you invest in a fad? (Fox news POLL )
Facebook is priming the news cycle, setting Wall Street a-buzz with the news of its pending IPO. Stocks may have an initial value of $34/share. Investors are lining up for bidding war. Is Facebook a good investment? In the short term, probably. Further out? I’m not so sure.
Facebook, a come-out-of-nowhere success story, has relied on venture capital for years now. Venture investment is optimistic and holds to a longer view on returns. Once Facebook is fully public, it must submit to the quarterly earning cycle, reporting on to shareholders on short-term forecasts. ‘Shareholder value’ trumps ‘vision.’ Does Facebook, a broker of other people’s information, have a future? Will they as profitable as they would like Wall Street to believe? Maybe not.
The tech world is less in love with Facebook than the mainstream press. Facebook came onstage five years ago when ‘social’ was the new thing.’ Facebook’s strategy orbits their original success, continually refining their social sharing model.
Facebook stopped innovating years ago.Worse for them, the company has failed to find any success in the mobile world. It faces a future of obsolescence and the risk of a new entrant like Instagram. ‘Mobile’ worries Facebook. Why? ‘Mobile is a Web-less Internet paradigm. Mobile apps don’t have Facebook ‘Likes.’ But ‘Mobile’ is going to be big, very big.
Marginal innovation. Faddish product. Troublesome reputation. Weak customer loyalty. Treating people like ‘product.’ Media hype. Does this sound like a good investment to you?
Interested in the Facebook phenom? There’s the Facebook Project, a video channel of social media experts sharing their opinion. I also recommend reading last week’s Forbes article ‘Here’s Why Google and Facebook Might Completely Disappear in the Next 5 Years.’ Good points, though I disagree about Google’s prospects.
A smartphone, a subway, a grocery list
Steven Johnson, author of my favorite book of the moment, Where Good Ideas Come From: The Natural History of Innovation, holds that there are very few ‘Eureka!’ innovations. Instead, most innovations happen slowly over time. Social networks, open information are key. He also says invention happens atop existing platforms. Johnson claimed Youtube couldn’t happen until WWW and digital media standards emerged. The WWW couldn’t happen until HTML existed and so on. Innovation happens when observant, intuitive people dabble in many areas. The seize upon something that is suddenly obvious and assemble the parts.
Tesco is a shopping store that used innovation to assail a much larger competitor in the Korean groceries market. By paying attention to the lives of working Korean people and looking at the available technologies, Tesco assembled something amazing out of existing parts. Tesco quickly gained market share and admiration from its new customers. And, I think, they developed a new platform for future innovation.
Exciting New Collaboration Twist To Google Docs
Today Google announced a new ‘mobile’ version of Google Docs. It is available in the Google Labs for you to try. Google licensed Ninetendo’s Wii technology to make document management fun and vigorous.
Microsoft has not responded with any ‘mobile’ version of its Office suite, but analysts expect to see something like this in the Xbox 480 LiveOffice edition, perhaps as early as 2013.
Gen Y consultants and industry bloggers climb over each other to report social-mobile announcements. Location awareness, the latest Android mutation, ‘augmented reality’ and Mashable gossip get these guys all sexed up. It’s exhilarating because they see immediate consumer reaction. People crave the new and shiny, and so far, the engineer has delivered.
When they turn their eyes to the more staid information technology vendors, those who sell to large businesses, they see it’s still 1997 back there. ERP vendors offer timid bolt-ons. Network companies crow about ‘security.’ Even Microsoft, the one vendor who does both business and consumer, seems content to amble towards mobile solutions. And ‘social software?’ Can we say “Social CRM” is about all they can trundle out?
What’s going on here? As someone in a large enterprise, I can tell you it’s not for lack of demand. There’s iPads in corporate backpacks. I see business people carrying both scratched-up Blackberry phones and iPhones. You’ll see clusters of employees standing by the open window, trying to share a feeble 3G signal on their personal devices.
Too bad the corporate Wi-Fi is denied to them. Skype? Blocked. Yammer? Blocked. ITunes? Blocked.
Blocked, blocked, blocked!
This is really consumer behavior behind the firewall. Employees would love to use their superior personal devices to access corporate resources, but corporate IT can’t deliver. There’s a few reasons why:
- Security. For years IT held the fortress safe against malware, worms and viruses. They do this with anti-virus software. They also assure safety with complete ownership of the entire hardware chain. “No non-corporate devices” are allowed past the firewall. Although there are flexible, robust VPN solutions now. IT Security is very risk-averse.
- Cost. Finance usually sees phones and service plans as IT spend, a frivolous IT cost that must be controlled. If IT says the devices must be corporate devices, then you better have a business case.
- Network. Most companies have creaky data networks that are optimized for file transmission and server-to-server connectivity. It is very expensive to improve networks for mobile’s needs (streaming, file services). And building a robust, pervasive WiFi cloud on top of it all takes more cold cash than they have.
- Budget. Not quite the same as cost, but businesses still (mistakenly) think mobile devices and service plans must be paid for by the company. A 1990 mentality that is a holdover from subsidizing ‘on-call’ costs for employees.
- Enterprise architecture. We still have a lot of two-tier technology in Enterprise Land. For browser-based systems, IE 6 reigns supreme. It’s an ordeal to recertify hundreds of applications on a new browser. Heck, we’re still developing dense, crowded ‘Web portals.’ How can you put that on mobile?
- RIM. “What’s wrong with the corporate Blackberry?” Management thinks these are ‘mobile’ devices for the next decade. A good phone that does e-mail and a neat-o little browser. What else do you need?
- Enterprises are transaction-based. There’s a whole lot of data fields in an internal business transaction. Just ask a road warrior how much of a trial it is to submit travel expenses. Now try to squeeze that into your iPhone screen. You can get away with lean UI for the home. The enterprise must relinquish its hunger for detail and exception processing before you can ‘mobilize’ a business system.
- Most middle management doesn’t get it. Yet. Mobile handsets? Those are for the kids.
- Application development expertise. App vs HTML5? ITunes or Marketplace? You’re speaking a foreign language. Most IT development teams are clueless here. And as a one-time developer, I can tell you that developing lean, simple UI is not a cultivated strength inside the enterprise.
- “Are you talking about that ‘cloud’ stuff again?” ‘Cloud’ is a bugaboo for IT management. It’s scary stuff, more frightening than ‘mobile.’‘Mobile’ isn’t ‘cloud,’ though they are related. IT must develop a unified strategy for both at the same time.
Enterprise software vendors sell to markets, young consultant. They make products businesses will buy.
Right now the customer isn’t ready.