Verizon has come out swinging at AT&T over the extent and availability of their 3G network in response AT&T has solidified a response with actor Luke Wilson as their spokesperson.

The First Spot

The Second Spot

Great use of the TV Commercial
Both spots for AT&T were 30 second commercials as opposed to the longer 1 minute spots Verizon has been running. The tactic AT&T is using is running both spots within the same advertisement break.

By sandwiching a couple of commercials in-between the two AT&T ads they give the impression that Luke Wilson had continued to cover the map with the post cards during the interlude. This type of storytelling really breaks down the fourth wall on the medium and acknowledges the presence of the audience.

AT&T Had to Answer
In addition to the Droid does ads Verizon has been running a series of holiday related ads that show AT&Ts 3G coverage in a poor light. AT&T has had some perceived issues with service mainly due to the strain the unparalleled success the iPhone has achieved has placed on their network. That being said, AT&T felt very strongly that Verizon’s ads on their coverage were missleading so much so they’ve actually filed a lawsuit against Verizon.

Rating the Commercial
I really like the testimonial from Luke Wilson, he comes off as a very down to earth celebrity and is very like-able. The commercial spots really played up this persona as well by having Luke’s dialogue interject a couple personal connections to some of the locations.

The use of the postcard gimmick was also really ingenious. Looking at a coverage map is a rather detached way of making a phone purchase decision. Putting it into perspective that all these places which are important to you, whether they are places where your family and friends are located or a vacation destination, drives a more human connection.

Conclusion
Verizon’s been on a roll with Droid and their aggressive attacks on AT&T, but these ads are a terrific response from AT&T. If the rest of this campaign features this kind of humor and ability to connect with the audience I think Verizon will have a fight on their hands.

I’ve been seeing huge movement towards cloud based services and I cannot begin to express how much this scares me as a consumer and why its even more concerning for the enterprise as a product offering. This post is my take on a discussion currently going on at the economist between a Microsoft Exec and the CEO of Salesforce.com.

First the Microsoft Definition:
•  Private Cloud: An internal service-oriented environment optimized for performance and cost that is deployed inside a customer’s datacenter. Powered by packaged server products including Windows Server and System Center family of products, private cloud provides compatibility with existing applications.
•  Public Cloud: Provided by service providers, public cloud offers customers the ability to deploy and consume services. In this category, Azure™ is a highly scalable services platform providing pay–as-you-go flexibility delivered from Microsoft’s datacenters.

Second the Salesforce Definition:
Cloud computing is a better way to run your business. Instead of running your apps yourself, they run on a shared data center. When you use any app that runs in the cloud, you just log in, customize it, and start using it. That’s the power of cloud computing.

Where I Stand on the Subject
I am diametrically opposed to what Microsoft calls the Public Cloud (which is just Salesforce’s definition of cloud computing) for the Enterprise except in the most trivial of applications. I’m more lenient of the cloud being used in consumer applications although I’m still opposed to it being main medium of storing my data, and being used to house personal information that I feel is sensitive. Additionally, anything I require substantial uptime for my personal use which I can conceivably get minus the cloud I’m in favor of.

What’s the Big Deal for Consumers?
Privacy – While there are some protections in place should your personal information be violated that doesn’t protect you from the fallout and the amount of time that needs to be spent cleaning up from a privacy violation.

Uptime – When you have everything on a computer its always available to you unless something is severely wrong with your pc (which usually would also ruin the cloud based service if you only have 1 machine anyways). The problem with the cloud is you’re on someone else’s schedule if they decide to take the site down for maintenance you’re out of luck. Also considering things like denial-of-service attacks or network outages you are almost assured to run into uptime issues at some point.

Speed – You can’t access the cloud at the speeds you can approach on your harddrive, while that may not be an issue for emails or word processing it does become an issue with things like High Definition Movies or large quantities of music and photos.

Data Integrity – If you don’t keep local copies you’re a slave to the retention policies of the service provider. Recent incidents like the SideKick fiasco create a clear concern of what can happen when you trust others to provide data backup and protection on your behalf.

What’s the Big Deal for the Enterprise?
Trade Secrets/Security – This is my favorite villain in this argument. If you’re accessing a service outside of your firewall you’re relying on someone else to implement an effective security policy. The problem with trade secrets is once they leak out you have little to no recourse on anyone who makes use of that information, sure you could sue your provider (unless your license agreement states otherwise) but that’s not going to get the genie back in the bottle.

Uptime – I’ve seen a service outage of a company that pulls in $200 million in revenues a year and it’s not fun. Doing the math their being down for 3 hours cost the company in all likelihood $300,000 in revenues. When you see numbers like that paying for your own servers and redundancy to secure uptime becomes a lot less costly.

Bandwidth Costs – Consider this if you move everything into the cloud just how much bandwidth would a company of 200 be generating? I don’t have the figures off the top of my head but this could be a sizeable cost and if you consider depreciating your in house assets you might find the variable cost of bandwidth usage exceeds the cost of the capital expenditures on equipment.

Conflict of Interest – Does the provider have the same goals as your enterprise? Having a always on service means there is a time when things need to be shutdown and cleaned up. While going to a 24 hour Wal-Mart at 3am you might notice restocking, you may see less checkers etc, and that’s ok because after all who is insane enough to go to Wal-Mart at 3am? Unfortunately, if you’re a successful cloud based service provider you have customers around the world meaning its always prime time somewhere. The worst possible scenario is a planned disruption in service that happens during your uptime as a business, and this is a likely occurrence with cloud services (see gmail and google docs going down during the West Coast prime time for 2 days in September).

Data Integrity – If you’re a business you have a disaster recovery plan/backup system (if not likely you won’t be in business very much longer). Here’s the question though, what is your cloud computing service provider’s backup system? I’m guessing most people can’t answer that question, and if you can its likely you’ve never seen it in action. This is a liability for a business that can’t be ignored and could even have legal implications depending on your business and what is cloud-sourced.

Control/Business Alignment – The great thing about having an in-house tool or hosted service is over time you can customize it to better fit your needs. Before jumping on the cloud bandwagon ask yourself if the hosted service you’re looking at is flexible enough to meet your needs.

The Private Cloud?
This is a product I can get behind it has the benefits people are looking for from cloud based services, but is controlled by the enterprise. I have always appreciated the server-side argument having dumb terminals that consume server based services but don’t store locally (provided the company has a solid IT staff and sufficient redundancy built in). The private cloud just expands upon this strategy by enable greater scalability for the private enterprise.

Not Without Benefits
I come across a little bit as one of those people up in the hills with a shotgun fighting the future I’m sure, but I don’t dispute that there are some attractive benefits to cloud computing. Things like scalability, remote access, cost reductions and simplifying your company’s IT environment. I also won’t dispute that cloud computing isn’t going to have a dramatic impact on the market-place; it has its market niche and can be a valuable service to some businesses.

Conclusion
In the end though I’m just not behind the transition to public cloud computing, put simply passing all my needs over to someone else is a bad experience. While I’m a firm believer on focusing on your strengths and bringing people in who can address your weaknesses in a corporation I do believe having people accountable within the organization is important to maintaining a solid foundation for the business.

Outsourcing is a reality and in some instances it does make sense, but whenever something ties directly into your core strategic strengths and product offering be very wary about how much you do outsource. The problem with cloud based services is they have a tendency to directly impact those strengths and offering and as such require heavy consideration before implementation.

Apple’s become quite the fixture in my blog lately much to my chagrin. Here goes another article about them, and all I can say is when you brand products this well it’s deserved when people are talking about.

What is Blue Ocean Branding?
I’m stepping a bit outside of what was intended in the Blue Ocean strategic product management philosophies outlined by W. Chan Kim and Renee Mauborgne. Their focuses were more on how an all up approach to creating a product that moved from a heavily fought area into an area where competitors had missed a market segment wherein their product with a unique value proposition could allow them to capture this segment.

My idea on Blue Ocean Branding is taking an existing product without changing it or with relatively minor changes refocusing the branding and messaging at a blue ocean space. This is not the same as what they’ve discussed previously and some may call it a “tacked-on approach” but we’ll see what value this kind of branding has given the example listed below.

Launching of the iPod Touch
When the Touch was released in September of 2007 it was focused primarily on updating the device look and feel for a music player, along with a secondary focus on a mobile browser and ability to receive content on the go with YouTube integration and iTunes Wi-Fi Music store.

Playing on the strengths of the iPhone the iPod Touch offered much of the value of the iPhone minus the cellular connection and AT&T service.

Personal Music Player Market Trends
This category has come under increased pressure due to 3 things:
• Apple’s previous success and large installed player base that is content with the product they already have.
• Zune and other lower cost device manufacturers trying to grab market-share placing downward pricing pressure on the entire category
• Phones and Mobile Internet Devices making huge inroads into this space

Where would the iPod Touch go?
The building blocks for this branding shift were available in the product from the day the iPod Touch was announced. but the ecosystem wasn’t in place until a full year after the launch.

Where was the iPod Touch going to go as the mp3 player was coming under attack? Into gaming.

Take a look at the current product pillars:
A great iPod
A great pocket computer
A great portable game player

There is hardly even a mention of the music player anymore in their marketing text. People already know the iPod plays music, the brand is synonymous with it in-fact.

Take a look into how they’re even defining iPod now:
iPod touch is music, movies, games, and apps. All at your fingertips.

Music may come first but its only one of four software/content offerings now.

iPod Touch as a Blue Ocean Branding Example
The product hasn’t changed since day one. The ecosystem built itself up around the product (I’m sure with more than a little bit of encouragement from Apple), but I really think the direction they went wasn’t a planned Blue Ocean strategy for this product. The focus and decision making has always been leading out with the phone but with 20 million iPod touches sold that’s too big of a market not to tap into.

In this case Apple looked around and had to wonder we have this shrinking product space, we have a device with some mobile computing power and capabilities where should we go with this? As the AppStore became attractive and developers rushed to be a part of this space they were given an opportunity to transition into a new space. This move by Apple created a blue ocean not just in the world of music players but also in the world of mobile gaming.

Conclusion
While there are some assumptions in this post (mainly around product planning of the iPod Touch) I do think this is a valid example of what I’m trying to get at. Unfortunately much like in the Blue Ocean Strategy book it is extremely hard to validate the assumption outside of the examples of reviewing publically available information (which I provided a link to above).

In this case, with minimal investment of time on product management, or new product design Apple has unlocked a new cash cow. By keeping the iPod Touch specs in-line with the iPhone from day one this opportunity was created.

I’m currently in the process of building a business model around a patent I filed a few years ago so this is top of mind. Creating value usually boils down into one of three categories either its the product, a service, or the distribution of a product. If you’re not a manufacturer or creator of the product you’re going to be focused on the service aspects or distribution as your key value add.

Business Models Focused on Distribution
Often this is an overlooked opportunity to differentiate especially by manufacturers as they tend to want to focus on product or services. This could result in failing to see a different channel for the product, or an inability to create product offerings that hit different segments. Especially with software this can be a critical error due to the monetization possibilities licensing unlocks.

Value of Distribution
By no means is this an exhaustive list but just a couple ways you can add value through distribution:

Speed of Delivery: Examples like McDonalds show us the advantage of creating a distribution mechanism that enables fast delivery of a specific good being used as the key differentiator in a business.

Consistency: Being able to deliver a repetitive high quality experience every time like Starbucks. Many would argue there is a better cup of coffee available to you every day, but Starbucks can guarantee the experience due to rigorous training and standardization.

Price Points: Walmart and Costco focus on reducing price by putting price pressures on suppliers. Their  sheer size and willingness to just not carry a product if the cost isn’t favorable enable them to compete on price in ways other businesses can’t.

Licensing: Being able to take one product and deliver it in many different channels hitting new price points and customers. Anti-virus software is a good example of this with the ability to push the same product (sometimes with a couple additional features turned on) via box product, volume licensing, or subscriptions.

Location: This could be anything from shelf space in a supermarket, to having a presence in the mall, or presence on a web property. This is all about opportunity andtraffic. 

Audience Targeting: Enterprise Rent-A-Car is a great example of how location as a pillar of your business model can make your business stand out. While other car rental companies focused on travelers Enterprise focused on people who had disruptions in their everyday commute option due to repairs or auto-accidents.

Conclusion
The phrase “a product so good it sells itself” is a fallacy. A strong business considers its distribution channel at least as seriously as it did its product creation if not more so. A mistake in these areas can make you easily irrelevant even if your product is great.

The other day in the comments there was an inquiry into why I’d stopped posting sections of the Creating Value eBook. My core audience of the site is divided between entrepreneurs and business professionals, and the eBook leans very heavily onto the entrepreneur side.

I had decided it would be best to stop  inserting the sections and just get the Creating Value eBook out instead. My goal was to have a more polished product with better formatting some pictures, and flare. Unfortunately, that’s been delayed.

Given the ask though the straight forward solution was just to post the raw eBook here so that the knowledge could at least be shared.

Goal: My hope was with this eBook I could create an easy straight forward set of questions a entrepreneur could ask to begin to understand what their product is and how they should go about selling it. This might be a bit rudimentary for those with extensive Product Management experience but  I think there can still be some value there.

Enjoy

MGMTNow Value Prop eBook