Thinking About CES: Big Trade Show A Thing Of The Past

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There was a time when major technology shows were a big deal. Even when I started Infinity Softworks 11 years ago there was always buzz in the developer community when these big shows came up. If anyone is actually paying attention, the Computer Electronics Show (CES) is going on this week.

A big deal? For some, maybe, but not for most. What is accomplished there? Maybe some deal making. But the shows are so crazy that meeting anyone there is impossible — you better have the meetings set up in advance. No, it seems like a lot of puffery to me, a place for technologists to go play one-up-manship with each other and waste lots of money.

It seems that the Internet has changed so much of this. The trade show may become a thing of the past as we can now congregate online for a lot less. On top of that, the web has made getting the word out a lot easier. Companies no longer have to wait for these shows to make major announcements. Because of the cost-effective nature of PR distribution and the 24 hour x 365 day news cycle, positive PR travels fast and well. Big trade shows and the buzz they bring are not as required.

Don’t get me wrong. I think there are plenty of shows that make sense. I went to Inman News’ Real Estate Connect conference in San Francisco last year. What a great event for getting people together, helping them become better Realtors, and giving people a venue to focus specifically on market issues and not the next sale.

But big technology shows that only serve as giant sales venues? Maybe not so much.

Of course, I say this as I am thinking about my next laptop and wondering what Steve Jobs will announce for Apple at MacWorld on the 15th…

Quicken Online: Web Apps, Here We Come!

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2008 may prove to be the year of the web application. Google has brought the spreadsheet and word processor online. I have been able to access my email online forever. And now Intuit is set to launch Quicken Online in January.

I couldn’t be more excited! But not just because I have been waiting for a trusted online financial manager that allows me to manage my finances from any computer, but also because of the implications.

Almost two months ago in my entry entitled Peering Into The Future, I mentioned that one of the biggest trends coming in mobile computing is connectivity and that this opens up the world for web-based applications. Both appear to be coming to pass. Already AT&T announced that the iPhone in 2008 will have Internet connectivity as fast as DSL and there are rumors that RIM is developing a BlackBerry that uses the same network (called 3G). I’m sure, although I haven’t heard, that Motorola, Samsung and the rest are not far behind.

Now, Intuit lends credibility to the web-based application. When big companies start to jump in it is a very good sign. Intuit’s online version will not only work in your web browser, but also on your iPhone (as reported by MacWorld Magazine here).

If software starts moving online and customers accept it, I predict that all of us — customers and companies — will be much happier. And that, my friends, will make a very happy New Year!

Fear and the US Economy

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I have been thinking a lot lately about the next twelve months, as most of us are prone to do each December. During this time, I have been thinking a lot about the big picture. What will make or break my business and, due to my heavy reliance on a paycheck, my personal life? The answer, I believe, is the abundance or lack of fear.

See, I believe more than any other factor that the US Economy is driven by fear. For instance, let’s look at the years surrounding 2000, when the stock market crashed and the “irrational exuberance” era ended. From 1993 to 2000 we had one of the largest and longest economic expansions in US history. It was built of a strong dollar and an expanding knowledge base of educated employees. From 2000 until 2007, we have had a vacillating economy. The good times were driven by a housing boom in most of the country.

But that picture is incomplete. What else happened from 1993 to 2000? Nothing. And nothing is a good thing for the US economy. There were no wars, no dire predictions of impending doom, no terrorist attacks, no perceived risk of biological or nuclear attack. Couple this with the rise of China and India, the solidification of EU, and the country’s pre-occupation with our president’s sex life, and there was very little to distract us from building businesses and making money.

From 2000 to 2007, the opposite has been true. First, irrational exuberance finally hit its peak and sent the markets down. Then, 9/11 happened and ever since we have been met with endless predictions of biological, nuclear and terrorist attacks. Every time we start to get comfortable in our skin, there’s Osama bin Laden on the screen again or dead people in Iraq and Afghanistan or a led-filled Thomas the Tank in my two year old’s mouth.

So how will 2008 turn out? That depends. Will the fear of not being able to flip our houses and pay for our collective credit card bills overwhelm us? Or will some blissful peace overcome us, leading to another year of economic expansion and happy bank accounts?

I know which one I prefer. I also know which one I fear.

Palm: A Love Story

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The general feeling, from what I can gather through multiple conversations with long standing Palm loyalist customers, seems to be that Palm is dying and that everyone who bought into Palm’s vision is mourning the loss. Given that, while I have been hurt by Palm’s decisions more than most, I’m not ready to say that Palm is dead. In fact the company may have a renaissance, a la its big brother Apple, in it yet. So I thought I would shed some light on the Palm story from someone who has been too involved over the years.

Palm Computing was founded to write software for other company’s mobile devices and found that those devices were horrible. Palm said, “Hey! We can do better!” and wrote their own operating system and designed their own devices. But the company struggled to get funding because so many mobile computing companies failed in front of them. US Robotics, a major manufacturer of modems at the time, liked what Palm was doing and bought a majority stake. At the height of the dot-com hysteria, 3Com bought US Robotics. 3Com was run (into the ground) by Eric Benhamou, its CEO, who also took a seat on Palm’s board.

In 1999, with Palm riding high, the management team pushed Eric to take it public. He refused and in so doing, forced Palm’s management team and a number of followers out the door. Donna Dubinski, Jeff Hawkins and Ed Colligan formed Handspring and licensed the Palm OS. This is the first time Palm was split in half.

Over the next couple of years, Palm continued to churn out interesting devices mainly because those devices were already in process when Donna, Jeff and Ed left, as I understand it. Palm was also pushed by Handspring (the first to introduce expansion cards) and Sony (much more stylish devices). Palm released really sleek and small devices like the Palm V series and some of the first wireless devices like the Palm VII. I believe it took about two years for the original team’s designs to work their way through Palm and into the market. After that, the quality of device really fell off.

Of course, the company went public anyway a year or two later anyway, making the force out of the original team stupid.

By my recollection, though, Palm had already lost its way by the beginning of 2002, at the point where the original team’s devices had already been in the market. Jeff was always quick to point out that the device is not a desktop replacement and therefore didn’t need to compete with Microsoft’s operating system offerings. The feeling at Palm pre-split was that it was more important how people accessed data and information, for instance, than it was for there to be high-res color screens and the like. There was also a sense that competing against Microsoft head-to-head, processor power to processor power, was a huge mistake. The original team was right, it was, and the follow-on team did it anyway.

By 2003, Handspring had run its course and they realized they needed bigger legs to move into the cellular business with its Treo line and the two companies merged back together. By then, however, the Board led by Eric Benhamou split the company a second time, this time spinning out the operating system group.

By 2005, Palm saw that the future was cell phones, not stand-alone handhelds, and pretty much laid off anyone specifically involved with the old line that couldn’t transition to the new. That’s where we got caught. Palm’s education team, which was focused on selling traditional handhelds to schools, was let go and Infinity Softworks’ play for high school mathematics was over.

Since then, Palm has made a living selling the Handspring-designed Treo line of products and transitioning as many of its existing handheld customers as possible. Eric Benhamou left the Board sometime in here also. Palm also bought back the operating system group in 2006, finally giving Palm the ability to innovate around both software and hardware, which in the cellular business has always been very closely tied together.

The popular wisdom is that Palm is dead. I don’t agree for three reasons:

1. The old team of developers led by Jeff, Donna and Ed are resurfacing at Palm and are very excited, although tight lipped, about what is going on. This is good news for the company.

2. The mobile market is in a state of transition, which opens the doors for “new” players. Palm is only one really cool device away from being back near the top of the market and being mentioned along with Apple for innovation. And as much as everyone is upset with the company, I sense that some really nice devices would bring a lot of people back into their camp.

3. It took two years for the original team’s devices to work their way through the company and for Palm to be “influenced” by new blood. This executive team has been back in charge and in control of the operating system for only one year so far. I would expect to see the second wave devices give way to a third wave at the end of next year, with this third wave influenced tremendously by the original team plus some new blood that came from Apple’s iPod group.

Will Palm die and be remembered as by-gone from another era outpaced by Apple and the like? Or will they follow Apple’s lead — where many of the original Palm employees came from — and resurrect itself? I don’t know and no longer get insider information. But I’m starting to sense some positive momentum for the beleaguered company.

An Industry In Transition

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I get the feeling that, technologically, we are approaching a huge inflection point. Look at cars, for instance. In the next few years we will see a massive transition in engine technologies that make them more efficient both in a gasoline and emissions kind of way.

I believe the same is true for cell phone industry.

In the last few weeks, huge announcements regarding openness and competition have taken place. Here are the ones I think are critical:

– T-Mobile and Sprint announce wi-fi support. Couple this with iPhone having built-in wi-fi that works off AT&T’s network and suddenly connectivity is changing. Have a wi-fi connection near-by? No problem. Don’t? No problem.

– AT&T pre-announcing for Apple that rev 2 of the iPhone will be 3G enabled. What’s 3G? Think internet access on your cell phone as fast as cable or DSL at home. No bandwidth lag on the phone means a whole new world for application development and device access. Devices with mediocre browsers will be in trouble as more and more content is delivered wirelessly to you anywhere you are. (As an aside, I would love to have been a fly on the wall when Steve Jobs heard AT&T announce this for him.)

– Android from Google is announced. Now this is a platform and isn’t massively changing the market in and of itself. But if Google is successful with their approach, we will have more interesting devices that work across networks and offer more choices for developers and customers alike.

– Open platforms have become the norm. Verizon joins T-Mobile and Sprint in the open platform approach advocated by Google. This could have a huge impact on how we buy cell phones and open up the market for alternative devices. Like to carry a wireless tablet? Today, the cost to partner with the big boys is too expensive for anyone other than Microsoft, Google and Apple. That might not be the case tomorrow.

– There is new bandwidth coming up for auction and anyone can bid on it. While I am no expert on the ins and outs of cellular bandwidth, I do know it is big deal when companies like Apple and Google bid on it. See, whomever controls the bandwidth has the right to set the licensing terms to others as to how it will be used. Computer companies like Apple and Google will see how to use that bandwidth a lot differently than Verizon and AT&T.

The bottom line is more openness, more choices, and higher bandwidth. As you can see by the names in bold, all the big boys here in the States are playing.

To this point in time, major carriers such as AT&T and Verizon have dominated the cellular game, lording it over hardware manufacturers, software developers and customers alike. This model may be turned on its head, with hardware and software companies gaining at least equal footing and consumers getting much better options.