First of all, there’s sheer size of the egos involved. The two executives can make as nice as they like in public, but as soon as some conflict arises in the deal–and it will–it’s going to be a clash of the Titans with these two. And I don’t see either one backing down for the sake of harmony.
Secondly, they are truly the technology world odd couple. Oracle is a dyed in the wool hardware and enterprise software company. They’re all about being big and complex and expensive.
Salesforce, is the original cloud upstart, even though back in 1999 nobody called it the cloud. They introduced and popularized the notion that people would store their valuable enterprise data on someone else’s servers if it saved them a few bucks and was relatively easy to use.
Then there’s the cultures. I can’t speak directly to this, but I can guess; and I’m seeing Salesforce is a bit more footloose and fancy free, and Oracle as a bit more buttoned down.
Yet for all these differences, after all this time, they are both large enterprise software companies. Salesforce can no longer claim to be the disruptor. It’s as much a conventional enterprise software company trying to do everything for everyone as Oracle.
As I wrote last Fall, both of these companies are struggling with change. The leaders seem to sense that they are being outflanked by smaller and cheaper rivals, but they seem unable to make the necessary moves to get their companies moving in a new direction. That happens when you’re the leader and reach a certain size. You react much more slowly to changes in the marketplace.
That’s why this move confuses me. Do they really think that by joining forces, that will somehow solve the problem? I’m not so sure. In fact, I think it will more likely create a whole new set of unforeseen problems. Certainly, creating a partnership between two very large organizations won’t make either one more agile or quick to react.
If you do a quick search on the deal, the first page of results will give a range of opinions on then on the merits of the agreement with people weighing on both sides with one or another thinking that each company picked the other’s pocket –or somewhere in between.
I’ll let you decide on who you think got the better of the deal, but in my view it’s wash because I can’t see this deal doing much for either company.
Partnerships are usually are based in trust and common needs. I don’t see either party really needing one another in this instance. Maybe Oracle believes it will make them more cloudy and Salesforce thinks it will them more enterprisey, but in the end what happens when you sleep the enemy? Can’t end well.
Photo by MïK. Used under CC 2.0 license.
The worst fears of the anti-cloud cabal came true recently when the curtain was lifted and we saw a glimpse of the extent of the US surveillance state, but is that enough to make you stop using the public cloud?
I’ve been listening to people debate about the pros and cons of the cloud since 2008, which was about the time the term came into popular usage. In fact, I remember well attending a discussion at a conference in 2008 where representatives from Google, Amazon and Salesforce.com explained the merits of cloud computing.
They were then peppered with an audience full of doubters. There was of course the Patriot Act to deal with, and for anyone from outside the US who had to respect more stringent privacy laws, the idea the government could demand data in the cloud at will was a show stopper for many –and remains so to this day.
The fact we now know the extent of government listening means that the Patriot Act was a minor annoyance compared to widespread warrantless Internet monitoring.
I’ve sat in similar discussions since. At CeBIT in 2011, The Germans, which as a country have particularly strong privacy laws, could not embrace the cloud even though many saw the advantages of a cloud approach.
But the cloud offers such a compelling economic case, in many cases that’s going to overcome any fear a company might have the government could be snooping on your data.
ZDNet had a couple of compelling posts recently about this. On the pro cloud side, Jason Perlow wrote in NSA Prism: The cloud laughs at the Tin Foil Hat brigade, “I hate to break it to you guys, but the government just isn’t that into you.” He added, “And this recent revelation about PRISM and other wide-ranging NSA electronic surveillance programs, while disturbing, fundamentally changes nothing about an overall shift to cloud-based computing.”
But ZDNet’s Steven J. Vaughan-Nichols isn’t so sure as he wrote in NSA Prism puts “public cloud” in new light. As Vaughan-Nichols wrote, “Let’s just take it as a given, if you put information on the public cloud, there’s a reasonable possibility that it can be looked at by a government [three-letter acronym organization].” He adds with certainty, “But, if you put your infrastructure on a private cloud you dodge this problem. Even a hybrid cloud—where you keep only low-value materials on a public cloud—could still do well by you.”
But it’s not that simple for many organizations. I saw CIOs from the San Francisco Giants, The Boston Red Sox and The Boston Celtics speaking last week at the E2 Conference in Boston. For these three CIOs, the cloud allowed them to run lean departments with 11 or fewer employees while promoting some extremely ambitious IT projects. As Bill Schlough, CIO of the Giants put it, “The more data that’s in the cloud, the happier I am.”
There are social, political and economic ramfications of government monitoring and I’m not about to minimize any of those, but I’ll put it this way: I’m inclined to agree with Perlow’s view on this.
The government doesn’t really care what most private businesses are doing, and if they did, it wouldn’t really matter if you were using public cloud services or your own data center. The NSA and other government agencies are amazingly resourceful when it comes to data collection. If Anonymous can get past your security, do you really think the NSA or some other government agency can’t?
There are a myriad of ways to gain access to networks without being inside an organization from phishing to keystroke loggers to social manipulation. Once inside the network infrastructure whether you are a malicious hacker or the government, you can pretty much do whatever you want.
With that in mind, if a government agency wants you, they’ll find you no matter where you choose to store your data, with a warrant or without it, whether you know it or don’t. Given that reality, recent revelations should not alter your approach, nor should it scare you off from public cloud usage.
Photo Credit: (c) Can Stock Photo
Up until the WWDC keynote this week, I was convinced that Apple simply didn’t understand the cloud or how to use it to share content conveniently across devices, but they surprised me on Monday with new ways to bridge the gap between iOS and OSX.
Among the changes you’ll see when you upgrade to OSX Mavericks later this year is a keychain that stores all of your security credentials across devices, whether iOS or OSX. As you can do with Amazon Kindle books, your books will now sync across devices and you can open an ebook on any device, and you will open it where you left off with any markups carried from device to device.
In addition, OSX now has a new powerful tagging feature, which is another step away from the folder/file cabinet metaphor we’ve been using across operating systems for years and toward a more free-form type of organizational structure. You can create tags on the fly and they sync across all your devices, so if you search for a tag on OSX all the files you have tagged with with that identification, whether in iCloud or on your hard drive will appear in the results.
What’s more, Apple finally introduced web versions of the programs in the iWork suite giving you any time, any device, any OS access to these programs. You can even use them on Windows machines and you can open and edit Microsoft Office documents inside iWork programs online.
The latter was a key missing link for Apple and it gives workers access to these programs and lets those users who prefer to escape Microsoft Office or avoid Google Docs to continue to work in the Apple system online and share files with co-workers who use Office.
For Apple of course, it keeps users who may be using iOS devices at work on their system regardless of the machine they may use for their desktop work.
These are just some of the connections Apple is allowing you to make across devices and it’s been a long time coming. Up until now, iCloud has been mostly confusing to me. I can’t use it in the sense of backing up my hard drive. I can save files from certain applications to iCloud, but I can’t drag and drop a bunch files onto iCloud as I can with Dropbox, Box or Google Drive.
I never got the sense until this upgrade that Apple got the cloud or really took it seriously. And it’s been a bit baffling to me given they opened that massive data center in North Carolina in 2010 and they’re working on another one in Oregon. Obviously they have plenty of cash to invest in a cloud infrastructure, but up until this week’s announcements, they never really took advantage of all that capacity.
I’ve never actually understood their cloud strategy at all. You can’t for instance in Mountain Lion access iCloud from Finder (at least as far as I can tell). You can store your iTunes library in iCloud and in fact, it tends to offload large swatches of your library by default. This often requires you to download a file before listening to it. This has two drawbacks. First of all, if you’re someplace you can’t download the file such as an airplane without WiFi, you can’t listen to the song. Second of all, maybe you just want to listen to the song, but you don’t want to download it and have it take space on your hard drive. Why can’t you simply play it from the cloud and leave it there?
I’m not sure Apple has answered these problems in iOS 7 and OSX Mavericks, but at least it has taken a big step toward using its massive cloud infrastructure to share content between iOS and OSX devices –and that is a huge step in the right direction.
Photo Credit: Apple
The latest comScore US smartphone market share numbers are in and once again the news is not pretty for Microsoft. As unbelievable as it seems after all this time, Microsoft lost a tenth of a percentage point in the latest figures to fall to a paltry 3 percent of the US market.
Mind you, this was in a month when Android actually lost .3 of a point and dropped to 52 percent, yet Microsoft wasn’t able to take advantage of even that opening. Instead, Apple gained 1.4 points to 39.2 percent.
Sure, we all know it’s been a two horse race in the mobile phone market for some time, but Microsoft has been making a case for third place, but it can’t even catch up and pass BlackBerry, which itself lost .8 of a point to drop to 5.1 percent. Maybe they’ll meet somewhere in their race to the bottom at zero.
Even if you look at IDC’s worldwide smartphone market share numbers for the first quarter, where Microsoft has actually passed BlackBerry in third place, the numbers are consistent with ComScore’s US numbers at just 3.2 percent.
It doesn’t get any better in the tablet market where Microsoft just slashed prices it charges vendors for software in an attempt to attract more vendors to build Windows tablets. Perhaps a better strategy would be to cut the prices of the units themselves, at least the ones they control, because they aren’t moving. In fact, Microsoft’s worldwide tablet market share according to IDC was just 1.8 percent for the first quarter. Yes, 1.8 percent. That, folks, is barely registering.
If you look at the big picture, the whole Windows 8 strategy to date has been a complete disaster for Microsoft. Even on the desktop where it is the undisputed leader — even as PC sales plunge — Windows 8 has to date done worse than Vista, which was without a doubt the biggest piece of crap OS ever delivered.
Now, I know Microsoft supporters have constantly said to me that you just have to give it time. On the desktop, the latest hope is 8.1 due later this month, but if veteran tech journalist Wayne Rash is right, this update isn’t going to change many minds.
The idea here has always been to have a somewhat consistent experience across all devices. It may not line up perfectly, but the look and feel is very much the same. The desktop has always lead the way for Microsoft and even that is failing badly to this point and likely having a negative impact on the mobile side.
Others have suggested to me that the tablet sales will take off once enterprise buyers get around to buying them. The argument goes that people still have to do work and that PCs and Microsoft Office are how work gets done, and therefore Windows tablets are the logical choice for enterprise users.
But I see a couple of flaws in this logic. First of all, the numbers don’t support the argument. How can you possibly predict big sales when you can’t even generate modest ones, but even beyond that, there is no evidence that people want Windows tablets and in a world where people are bringing their own devices, that matters.
I keep waiting for Office 365 and SkyDrive, the cloud version of Office and SharePoint and Microsoft’s cloud storage solution, to be the saving grace here, but so far that hasn’t happened either and Microsoft’s mobile sales across phones and tablets remain bluer than blue, sadder than sad.
At some point we have to stop making excuses, and suggesting that sales will come if only we wait until the next upgrade. We have to look at these numbers and say that Microsoft’s mobile futility is simply its reality and the sales aren’t there and they aren’t coming either.
Photo Credit: Ron Miller. Used under CC 2.0 Share Alike/Attribution license.
Last week I wrote about a panel I saw at MIT CIO of IT dinosaurs who were clearly afraid of the cloud and cited every bit of FUD that came down the pike. This week, I’m pleased to say I came across a survey of actual cloud users that found that once customers use cloud services, they find most of those fears and concerns are unwarranted.
The survey was sponsored by Computer Associates and conducted by Luth Research and Vanson Bourne of 542 organizations in the US and Europe using various types of cloud services –infrastructure, platform and software– for a year or more. That last point is particularly important because these folks had taken the plunge.
But what the survey found was that for the most part people were highly satisfied with their cloud experiences including security. In fact, the survey found that a majority of respondents were worried about cloud security with 46 percent citing security as the most important factor holding them back from moving a particular app to the cloud. The other top reasons were privacy/legal (34%) and “certain apps are too core/critical to our business” (28%).
Yet interestingly the survey also found that those who had actually moved applications or services to the cloud found the cloud security met or exceeded their expectations a vast majority of the time with only a small percentage saying it failed to meet expectations. The numbers praising the security were actually quite impressive with 98 percent finding it met or exceeded expectations and this was across infrastructure, platform and software service offerings. Indeed, the report stated that when people asked why this was so, almost a third responded that security had not been as big an issue as they had thought it would be.
And while the chief concern of cloud naysayers is always the security risk, what this survey found was when people actually use cloud services, they find that the cloud is not as risky as they believed it was.
As with so many assumptions when it comes to cloud, there is this built in bias that the cloud is inherently less secure than in-house. When you think about it, cloud vendors live and die by the level of security so if they had breaches on a regular basis, they probably wouldn’t be in business very long.
Vendors can cite their security credentials until the cows come home, but it’s hard to convince someone is sure it’s otherwise.
That’s what’s so telling about these results. Many of these folks still share some of those of same beliefs. They move x (email, CRM or file syncing) but they won’t move Y (mission critical app whatever). Yet when they get experience with cloud vendors for the non-mission critical aspects of their businesses, they see that the vendors really do know what they’re doing.
Once a customer experiences success with one aspect of the business, it only makes sense that others will follow as they reap the benefits of moving swaths of their data centers to the cloud.
You might not be able to ever persuade the person who’s truly convinced that the cloud is less secure, but the data continues to pile up that it’s just not true, and sooner or later the FUD we’ve been hearing for years, and were still hearing last week in Cambridge, has to fade away.
Photo Credit: (c) Can Stock Photo
You would think a technology conference at MIT would be full of cutting edge and cool discussions, and for the most part you would be right, but in one instance earlier this week at the MIT Sloan CIO Symposium, I witnessed IT dinosaurs and I was more than a bit surprised by that.
During a session on the misnamed, evolving cloud agenda, I saw a lot of regression instead. I heard IT executives dismiss cloud with tired old arguments, ones that as one colleague put it later, he thought we were long past.
As you would expect the participants suggested:
- The cloud wasn’t secure enough
- It was nothing more than mainframe computing in a different package (It’s not; one was about scarcity; the other is about infinite supply)
- You could get stuck with a cloud vendor (As though that never happens with on-premise licensing schemes).
- Hackers will attack. (As though you’re safe from that behind a firewall)
- User passwords are weak so it is therefore less secure.
In fact, we heard every bit of cloud FUD ever generated over the last five years.
What we didn’t hear in a cloud forum in 2013 was one person actually singing the praises of the cloud as a viable, cost-effective, secure alternative — and that included the CIO of a cloud company.
I’ve been to MIT CIO conferences on and off over the years and I recall one back in 2009 that was all about the cloud. That was because back in 2009, the cloud was still a relatively new concept and CIOs were just getting their heads around the idea of putting data on somebody else’s servers.
Sure, people had been using Salesforce.com since the turn of the century, but that aside, conceptually most CIOs were just coming to grips with it — and at the time that was completely understandable. Yet even then, I heard cutting edge folks talking about cool projects like military-sponsored private cloud setup — even though we didn’t call a private cloud back then.
As I wrote on Daniweb at the time, Rear Admiral Elizabeth Hight, vice director of the Defense Information Systems Agency explained her system. “Hight explained how the military has set up a flexible set of cloud services that enables people in the field to set up and break down a project very quickly, a must in a military situation. Hight said they have a secure system and they are able to provide their constituents what they need on the fly.”
There was more than a bit of irony when Hight talked about her military operation in the cloud and a drug company executive on the same panel complained that the cloud wasn’t secure enough for her organization.
Fast forward 4 years and you have a conference with an innovation theme, a hot topic for CIOs these days as they grapple with trying to staying relevant in a digital world of rapid change. And yet we have a panel full of industry represenatives complaining about the cloud as though it were some new concept worthy of their fear and contempt.
That we are still having this discussion at one of the centers of technological excellence in 2013 is surprising to me, but it was even more incongruent when MIT professor Andrew McAfee bounded on stage for the wrap-up keynote right after the cloud panel discussion ended, and waxed eloquently for 10 minutes or so on the power of digital transformation.
I wonder if the panel participants got the message or if as I suspect they didn’t listen. If not, their organizations will surely suffer as the industry shifts rapidly before their eyes and they are left holding the 2009 IT playbook wondering what happened and how it all got away from them.
Photo Credit: epSos.de on Flickr. Used under CC 2.0 Share Alike/Attribution license.
SAP, the quintessential big enterprise software company is making a big change. It’s going all in on the cloud, and as the New York Times reports, it’s a move that could alienate some of its enterprise customers.
SAP doesn’t seem to care. There is no “innovator’s dilemma.” It recognizes the future is in the cloud and its firmly aiming its business in that direction. This is in stark contrast to companies like Microsoft and Adobe, which have made nods to the cloud, but haven’t really fully embraced it.
Adobe turned some heads recently when it announced it was dropping the boxed version of Creative Suite in favor of a product they were calling Creative Cloud. It sounded very much like they too were going all in on the cloud, leaving the world of physical software behind, but when you dig a little deeper, you see that it’s not really a cloud suite at all. The main applications of the suite like Flash, Dreamweaver and Photoshop actually are downloaded and installed on your desktop.
As Roo’s mother might have said in Winnie the Pooh, “Roo dear, if the applications are on the desktop, it’s not really a cloud application.” Sure, it has file sync and share and some other cloud pieces, but at its core it’s a desktop subscription service, not a cloud at all, and what appeared to be a brave, even bold move by Adobe isn’t that brave or bold at all.
Similarly, Microsoft talks about the cloud a lot and it says what you expect a cloud vendor to say. Heck, at the SharePoint conference in November it was encouraging customers to go to the cloud version of SharePoint even if its customers weren’t necessarily ready to go with them. But again a closer examination shows this isn’t cloud at all, it’s a fully hosted version SharePoint, same as the one you install in your data center. The only difference is the location of the software.
It’s important to note that Microsoft does offer some pure cloud services in that it owns Yammer, a cloud company it bought last year and it has Azure, which appears to be a pure cloud development platform, but it also throws around the term when it’s not always appropriate.
But now we have SAP saying they’re a full fledged cloud vendor, but can we believe them anymore than the others? I think we can because the evidence points to a huge cloud investment in the form of 7 data centers around the globe and 30,000 computers put to bear on the project for starters.
That would suggest a company that is serious and not just talking the talk and indiscriminately throwing around the term “cloud” for the marketing points it gets from it. The New York Times article even suggests that SAP could be building out infrastructure services that could put it in direct competition with Amazon Web Services.
It always gets interesting when established companies go after the disruptors and try to beat them at their own game. Amazon has a built-in advantage in a significant head start and an acute understanding of the cloud that can only come from a company that’s been built from the ground up as cloud vendor, but SAP brings enormous resources to the table.
Right now SAP appears to be doing and saying the right things, but whether it can make the transformation into a pure cloud vendor remains seen. But it sure should be fun to watch it try.
Last week, I was more than amused to read the statement from Microsoft Chairman Bill Gates on CNBC about iPad users. While trying to promote Microsoft Surface tablets, Gates’ reportedly told the cable news station: ” A lot of those [iPad] users are frustrated. They can’t type, they can’t create documents, they don’t have Office there.”
Sorry, Bill, but that’s just a completely twisted and confused view of tablet usage in general and iPads in particular. The fact is, if we wanted a laptop running Windows and Office, we would buy one. A tablet is a touch device and as such it’s a totally different animal. While we are still learning how to use it as a content creation device, what we need is a little more imagination about how to take take advantage of the new computing approach, not a return to Windows and Office.
But this statement was revealing in itself because it brings to the surface, if you’ll pardon the expression, the whole problem with Microsoft’s tablet strategy.
They say all the right the things (most of the time) and they sound like they really get tablets, but the fact is they don’t, not even a little bit and the statement from Gates illustrated this better than any discussion of their corporate strategy ever could.
I’ve used Windows 8 and Office 365 on a tablet for instance, and Microsoft has not tuned it to the tablet experience at all. The Windows 8 front-end tiles make sense, but once you get past that into Office 365, it’s the same Office as you’ve always known on the desktop with all its complexity and no attempt whatsoever to exploit the fact you’re on a touch device.
I found myself frustrated trying to use it with my finger as a touch application until I connected a bluetooth keyboard and mouse. So to that extent Gates is right. It really is frustrating using Office on a tablet. But that’s because it’s still essentially a desktop computing application moved part and parcel to another device. There has been no attempt on Microsoft’s part to push itself to redefine Office for the touch experience — and frankly it’s exasperating and baffling. Why wouldn’t you do this unless of course, you don’t understand the new computing model.
As John Blossom wrote on Google + about the update to Windows 8 called Windows Blue, “Microsoft remains attached to the notion of installed software, period. Yet, at the same time, it’s trying to move its customers into cloud-based apps. It has an inherent conflict of interest in this mix,” Blossom wrote. Blossom’s right and what he writes is applicable to Microsoft’s tablet approach. It can’t let go of the old model, even as it tries to move its customers to a new one.
All of this tends to dent their credibility when Gates starts talking about what iPad users might want, and it’s just embarrassing to have your Chairman sounding like a 90s has-been on TV grumbling about iPads, and how what users really want is a return to the days when his company controlled the computing experience, all installed on the hard drive or server.
I’m sure he wishes that’s what most users still want, but so far, there is absolutely no evidence that people want Surface tablets or even that tablet users want a keyboard and a copy of Office on their tablets. That’s may be what Bill Gates wants and what the company he helped found hopes happens — but that’s very different.
The fact is the market has shifted in a dramatic way and Gates moaning on TV about it, only makes Microsoft appear desperate and out of touch.
Photo Credit: batmoo on Flickr. Used under CC 2.0 Share Alike/Attribution license.
Last week I was traveling covering a conference and over breakfast I read the Wall Street Journal (the paper version). I came across this article, Why Aren’t Smartphones Making Us More Productive? I was concerned. Why aren’t they? Then I read the post and realized it was rubbish.
Of course, smartphones and other mobile devices are making us more productive. Maybe the Wall Street Journal writer needs to find some different sources or maybe economists are having a hard time measuring productivity using whatever tools they have, but make no mistake, it’s happening and it’s like a slow train moving out of the station. It’s going to gain momentum as people figure out new ways to take advantage of mobile devices.
Look at just about any field and mobile has disrupted traditional business. Taxis? How about Uber, which is has driven traditional taxi companies to distraction because it’s much more efficient. You open the Uber app on your smartphone, order a taxi and watch as it comes toward you in real time on a map. It beats standing on a corner with your arm raised trying to get a cab driver’s attention. And it works. People love the service because it’s customer-centric.
How about travel? Take a look at Airbnb, a service that connects travelers with people who have rooms or apartments to rent. Using a mobile and social model, Airbnb lets you search for a place to stay, contact the owner directly and make arrangements. The price is set beforehand, so there are no surprises. The social comes into play because you can rate and comment on the quality of the stay and the accommodations. And it’s working too because it’s so simple and it provides a person-to-person direct link that only mobile devices can bring.
And mobile changes the dynamics in interesting ways for other businesses too. Box customer Sunbelt Rentals, for example, went from a system of using paper binders to using iPads running a custom version of Box. Gartner analyst Karen Shegda reported at a Gartner Portals, Collaboration and Content Summit session last week, that the company saw a 66 percent increase in leases after switching from paper to the iPad and custom app, and reported an astonishing 181 percent return on investment.
Shegda went on to say that Gartner estimated that within 2 years, 20 percent of salesforces will be using iPads. Given the productivity increases of Sunbelt Rentals, it makes me wonder what the other 80 percent are waiting for. One thing I’ve noticed about iPads is that they are a perfect sales tool because they don’t get in the way of the human interaction between individuals. The iPad is a tool that smoothly integrates into the sales process.
And if you get past the selling to the sale itself, you can expedite the process by filling out whatever forms are required and getting an electronic signature on the spot. It’s fast and relatively painless and it’s all done while the customer is ready to buy.
These are just a few examples. I didn’t have to cherry pick them either because there are countless other stories of massive increases in efficiency and productivity being extracted from mobile. Why the Wall Street Journal can’t figure this out is a little baffling to me. The irony is that after saying mobile wasn’t living up to its promise (however you define that), the writer went on to give several examples of his own of mobile productivity increases.
Mobile has the potential to change many different aspects of the business process. All it takes is some imagination. Companies which are reluctant to take the leap may find themselves leap-frogged by the competition or that users simply find more efficient mobile tools on their own.
The bottom line is that smart mobile apps make your workers more productive, no matter what the Wall Street Journal may think.
Photo Credit: (c) Can Stock Photo
I’ve been studying a lot about disruption recently, and one thing is clear. Everyone gets disrupted eventually –and in the digital age the likelihood is accelerated dramatically. So it should come as no surprise that after more than decade of dominance, Apple is facing disruptive forces in several of its product lines.
What will be interesting to watch is how Apple reacts to that unusual position, and if they can continue to innovate in an increasingly hostile environment.
It’s no secret that investors have lost favor with Apple as the stock price has gotten whacked over the last several months, even though evidence from their earnings call this week shows a company that’s still very strong, but getting squeezed on its margins. The focus for many was on the fact that Apple had a reduced year over year profit for the first time in memory, even though its sales figures were actually up year over year.
Apple is still selling product like nobody’s business (literally), selling 37.4 million iPhones in the quarter compared to 35.1 million a year ago. As for iPads? They sold 19.5 million iPads during the quarter, compared to 11.8 million a year ago.
All in all, by just about any measure it was still a healthy quarter. Would you rather have sold almost 38 million iPhones or 4.4 million Lumias? Just saying.
Meanwhile sales of Macs were flat, but as CITEworld editor Matt Rosoff pointed out on Twitter, flat is a whole lot better than the precipitous 14 percent drop for desktop PCs in the first quarter.
The trouble with eye-popping numbers is that it’s hard to sustain year after year, and this especially true as more and more interesting devices compete for our attention. As James Kendrick wrote this week on ZDNet, Apple needs to get its game on in the smartphone race because the iPhone is beginning to look a little dowdy compared to its competitors.
Same is true for the now venerable (that’s polite for having been around a long time) iTunes. As BusinessWeek reported, iTunes is facing pressure on a number of fronts, especially from streaming services like Spotify (a personal favorite) and rdio. While iTunes changed the music business when it came out, the iPod, which drove that part of the business, is a device that’s well past its prime and people aren’t as interested in owning music anymore. The article quoted, Ted Cohen, a recording industry consultant, who put it this way: “It’s no longer about individual tracks, it’s about access,” says Cohen. “The concept of buying music at 99¢ a song is becoming irrelevant,” Cohen told BusinessWeek.
Overall though, Apple still appears to be a healthy company, but what they can’t do is rest on their past successes and think they can continue to produce at the same level. Sustaining the kind of growth they’ve been on is not easy and probably unprecedented. To continue to grow with shrinking margins, they will need to expand the product line in new directions while updating popular products like iTunes and the iPhone to appeal to the changing tastes of the marketplace.
Tim Cook hinted that there would be new products and services coming in the Fall and throughout next year. I can’t imagine sitting still and getting complacent, but they cleverly plucked low-hanging fruit with the iPod, the iPhone and iPad; recognizing that nobody to that point had done a good job with these products.
Finding similar areas to exploit moving forward is going to be harder, but if Apple hopes to sustain its growth trajectory, it needs to start innovating and fast.
Photo Credit 1: Dick Thomas Johnson on Flickr. Used under CC 2.0 Share Alike/Attribution license.
Photo Credit 2: thetaxhaven on Flickr. Used under CC 2.0 Share Alike/Attribution license.