Matthew Sekol

"The basic tool for the manipulation of reality is the manipulation of words."

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Chromebooks – Threat or Google’s Next Passing Thing?

I love reading an article I completely disagree with! Alastair Knowles wrote an excellent article about how Microsoft should be on the lookout for Chromebooks. This is absolutely a real concern for Microsoft. Gartner reported Chromebook sales will likely triple by 2017.  With the ongoing fight between Bing and Google Search, Office 365 and Google Apps, etc., this is an interesting comparison to call out because it does bleed into other areas.

Before we start, my career has been built on supporting and now selling Microsoft solutions, so I’m a bit biased. Still, I was one of the first to get a GMail beta invite back in the day and it was from Microsoft and Bungie’s ARG (Alternate Reality Game) for Halo 2! My wife is a pretty big fan of GMail, but I’ve gotten tired of them forcing me to keep all my mail (just swipe right on your ActiveSync device for GMail – Archive, not Delete appears! Ugh! Side note: Microsoft fixed this issue with the Outlook app).

Personal preferences slightly aside, let’s break it down from the Microsoft position with much respect to the original author, leaving just a little bit for Google.

There are so many ways to break these arguments down, but I think combining ROI, Academia and Hardware Revolution together is a good place to start.

Not everything comes down to cost. Chromebooks are popular and cheap, but conversely Apple products are massively popular and expensive. Microsoft is floating somewhere in the middle. With Windows 10, they will be (and have been since August) pursuing the sub-$200 PC market and tablets more aggresively while maintaining their higher end performance PCs through a consistent OS. This is a direct affront to the Chromebook (cue dramatic music).

Beyond that, Microsoft is bridging the gap with mobile and PC with the One Windows experience that allows any app on any device through Adaptive UX. Ubiquity and consistent experiences are the name of the game. Both Google and Apple are missing this point (Android/Chrome OS and Mac /iOS).

Google seems to be shoehorning Android apps into Chrome OS and even is potentially making a massive mistake in trying to interject itself into the web app process in general for the sake of additional revenue with something as innocuous as app notifications. Yikes!

The too-little-too-late argument defeats itself. Just like Google has a chance to compete, Microsoft absolutely does as well and Windows 10 is right around the corner! Consider Blackberry, the pinnacle of mobile information in its time. Apple and Google have both squashed them. As long as there is any refresh cycle on hardware or OS, a contender has a chance to change the game. Microsoft should be relying on this cycle to shore up their numbers from the Nokia purchase. Think about how many smartphones you’ve had in the past 10 years. Any of those refreshes is an opportunity for someone to come grab market share. The market itself is an agent of change! (Note: This is how Chromebooks likely got a toe-hold!)

With the Hardware Revolution, Google started out with a Acer and Samsung as their OEMs and has now grown across multiple OEMs, including themselves. For years now, Microsoft has partnered with OEMs to make PC hardware. They made a huge shift and started making their own hardware with the Surface. Initially this change was admittedly confusing with the RT and Pro versions. RT was likely an early attempt at a Chromebook competitor, but clearly Microsoft missed the mark. Microsoft has dropped the Rt, streamlined it after the Surface Pro 3’s release and has now really hit their stride. The story seems to be shifting upwards, especially in their education play.

Speaking of which, not only has the Chromebook made waves in education, but Google in general has been a choice for start-ups. I’ve seen them compete in this space, but I still maintain that once your startup grows up, you will need the Enterprise features akin to Office 365 and not Google Apps. We’ll get into that more a bit though.

In regards to education, the tide may be turning with the Surface. Like this article states though, you have to go beyond the hardware to the real collaboration features of Microsoft. Even Apple has been having issues maintaining their stanglehold on education lately.

Having said that, let’s lump the following together and see what we get: Productivity, User Friendliness and Innovation.

I’ve long been a proponent of Microsoft Productivity stack. There is a reason why Office is the number 1 productivity suite in the world, having crushed other contenders over the years. I’m not going to get into the all the reasons, but it comes down to usage, not features. You can check out my arguments here for How to Use 15% of Office or How to Use Google Apps.

I will say this though – I used Google Apps in an Enterprise for a year. We switched everyone from Office 365 when my company was acquired. One of our divisions was sold to another company and the first question was – will we get Exchange back? The answer ‘yes’ was met with resounding applause (true story).

From a user friendliness perspective, this is actually where Microsoft shines and the OEMs fail. The OEMs are the reason for bloatware, not Microsoft. Just wait, those same OEMs will hit up Chromebooks with bloatware if they haven’t already. Samsung started the trend with the Chromebook 2 and “premium apps.” Try a Surface Pro 3 or buy from the Microsoft Store – no bloatware in sight via their Signature Series!

To be fair, some people look at Windows and Office as complex and unweidly. In truth, Microsoft has made robust solutions for OS and business productivity so that anyone can use them. From my 5 year old kid to my grandmother, we all use Windows 8.1! Note: I’m not sure how battery life comes into play here as my Surface Pro 3 and Acer S7-192 last pretty much all day performing power user workloads. This has gotten much better in the past 2 years.

When it comes to innovation, Google is all over the place. They do continually innovate, if you consider innovation to be an ADHD like attitude towards bringing up new services and removing them (insert lament for Gtalk, Froogle, Google Buzz, Orkut, etc.). The fact remains though, their core services remain largely unchanged and unimproved from an end user perspective. Search has had some controversial changes lately, but the search UI and the UI for GMail look largely identical to how they looked in 2004 (insert further lament for Google X, which was one attempt at a UI change).

I could (and have) written articles just on Google’s lack of innovation, but let’s talk about patching. Microsoft has an extensive program to test for security issues and get them patched. Over time, less of their patches require reboots, but typically, they still do. Security patches are clearly overwhelming, but they do serve their purpose. I don’t think a monthly reboot is too much to ask, but I get it. Still, 1 in 5 Android apps have recently been announced to be malicious! This is the largest mobile OS on the planet. The point is – the bigger you are, the more complex these patches become.

Surprisingly, you don’t have to look to far to see recent examples of excitement around Microsoft patching. Windows 8.1 was well received. Also, it was free, like Windows 10 will be. Speaking of which, the patches for the tech preview of Windows 10 are going exceedingly well.

Where Google is really failing when it comes to user friendliness and innovation though is limiting their offline features to Chrome only! Microsoft’s version of that is any device, any platform. Look at that, I addressed Dependence on Internet Access (not!) also!

You might have heard about Google Fi, which seems revolutionary. But, it is only supporting Google Nexus 6 at launch. Google is going the wrong direction by forcing a certain subset of their users into their playground. Innovation requires real risk, not just capital.

I think Alastair is right when Addressing Limitations. You can’t be everything to everyone and I doubt even the low end Microsoft platforms and regular Chromebooks could handle heavier workloads. Whether or not Google wants to compete in this space though remains to be seen. Google’s modus operadi seems to be ‘good enough’ solutions.

I don’t say that lightly either, the failure of Google+ and the fact that it underpins all of Google’s authentication is a bit concerning. My hope is that they remove or downplay the social aspect more and just make it an authentication platform like Microsoft Live.

Certainly, Chromebooks have their niche, for now. They’re not in nearly as many countries as Windows and depending on how the Office 365 vs. Google Apps fight plays out, the Chromebook could ultimately go the way of the Blackberry or be folded into an Android OS platform for PCs, aligning Chrome OS with Android. Still, Google has a proven history of killing products that it can’t get it’s core business into. For Enterprise adoption, this is scary. For BYOD, not so much.

I do agree with the last point – Microsoft has a lot of fallbacks if their latest OS coupled with the latest hardware doesn’t sway consumers, but I think the Surface Pro 4 is going to be hugely successful. Perhaps Project Spartan will eventually become an OS itself, similar to how Chrome OS started. I can’t see it playing out this way though. Microsoft is a company in transition and the old stodgy ways are gone. For some reason, Google seems to have taken that burden up.

How Providers and Distributors
are Dooming the Future of
Content

It seems like the content providers just can’t figure out content distribution. Piracy is rampant, yet the options to get content are more confusing and siloed than ever before. Consumers are being driven away from the traditional cable/satellite subscription model and towards a solution rife with disparity. This isn’t a problem limited to just television, movie content seems to be annoyingly unavailable when and where you want it. Can anyone get this right?

HBO – what have you done?
There’s no denying HBO is a juggernaut content provider. It sits atop the premium cable channels as king with “Game of Thrones” leading the charge. Despite this great content, they have a massive distribution problem. At $15-$18 a month for the channel, they are finding a lot of people want the content and don’t want to pay for it. As evidence, “Game of Thrones” was the top most torrented show of 2014.

HBO’s latest announcement though is that it will simulcast “Game of Thrones” across several countries, which is a page ripped from the record industry’s latest move. There is a big assumption here that people just want to see it immediately and, if they can’t, they will pirate the show. More likely, people are just looking for it immediately because they are worried it will get pulled. The more savvy pirates have schedulers that just constantly check for content on torrent sites or UseNet groups.

This quote from HBO’s CEO Richard Plepler reveals a common content delivery misperception that compounds the issue:
“We see a big opportunity for a stand-alone HBO product around the world,”

This shows a massive lack of understanding regarding HBO’s place as a content provider vs. a distributor, like DirecTV, Netflix or Amazon. Instead of moving towards a model where a consumer can pick from a range of distributors and still get to content, consumers are now forced to choose a content provider on a specific platform, but still at the same rate.

HBO-Now

This brings us to HBO Now and Apple TV. HBO had a massive opportunity to not only embrace ‘cord-cutting’ consumers who have dropped their cable/satellite subscription, but establish itself as a ubiquitous and portable solution across platforms. Unfortunately, it has done the opposite. With this announcement, it has out-priced itself by offering HBO Now at $15/month and offered the solution to only Apple users, isolating everyone else. They could have built an application across platforms (including Google Chromecast, Xbox, PlayStation, Amazon Fire TV Stick, Roku, etc.). This move will not stop piracy.

What HBO should have done was offer the subscription at a lower rate than its cable/satellite providers and offered it on more platforms. Leading the charge for content ubiquity over their own provider network would’ve opened up other premium cable channel providers (Cinemax, Showtime) to do the same. Even AMC, another juggernaut content provider of late, could’ve gotten into the game. This could have ultimately forced satellite and cable providers to start lowering their subscription costs as well. When more people have more options to get content, the cost is driven down at the distribution level, but raised at the content provider level. When that happens, content distributors subscriptions might go up due to the lower cost and variety of options.

At the far end, we could have all started managing our own content subscriptions. What a wasted chance!

Powers at PlayStation
I finally feel like I got on the boat early! I’ve been reading the “Powers” comic book since the first issue. I was extremely excited to see that it was being developed into a TV show, but there’s just one problem. I have an Xbox One, and “Powers” is only airing on the PlayStation network. So now my only legal choice is to wait and see if/when it comes out in another format. I certainly am not dropping hundred of dollars on a PS4 when I’ve made my console choice and I’m not the only one!

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I could choose to subscribe to PlayStationPlus for $50/year and watch “Powers,” but that just doesn’t make economical sense and that isn’t the point of it anyway. PlayStation (like Xbox) wants the additional content as incentive for you to subscribe. A consumer not only receives video content, but also can take advantage of the free games and other online benefits.

PlayStation has definitely guaranteed that “Powers” will be pirated by distributing it on their own network only. That, and they’ve likely doomed it to failure since it won’t reach a lot of consumers.

This is another example of a missed opportunity to drive consumers to choice and their own content subscriptions. They could have easily added Amazon Prime and Netflix as content distributors to this.

Going the Other Way
On the flip side, distributors are getting into the content provider game, which perpetuates this mess. Both Amazon and Netflix have started offering content as part of their subscriptions and both have unique hooks into their other services. Personally, I like Amazon Prime for the free shipping. The content is really just a side benefit. Even renting movies on Amazon and their free (and sparse) Prime video content isn’t worth the subscription alone. I will say though, I am really looking forward to “The Man in the High Castle.”

man_castle

It makes a huge amount of sense for Netflix to offer original programming since their base consumers are looking for video streaming already, but they can’t seem to hold on to studios very well. Every month, there seems to be another article that outlines which movies and TV shows are disappearing. Amazon has this problem too, although it was very self-inflicting. Surely, Amazon and Netflix wouldn’t allow their content to be distributed via another provider!

As a result, every content provider wants to be their own distributor and every distributor wants content exclusivity and will get it via their own content. Frankly, this is killing profits and just contributing to piracy.

Let’s hop in our time machine to 1999 and find out what how we used to consume video content.

You have arrived safely in 1999 and want a movie. You have two choices, buy or rent. Regardless of the choice you make, you can visit a store any find any movie you want(depending on stock). You can even find the same movies on VHS or DVD, depending on your player. These are industry standards and consumers follow them.

Now, let’s go to an alternate timeline run by content providers and distributors.

After a rocky trip, you arrive in 1999 and want a movie. Everyone is intimately familiar with content distribution channels and know which stores carry which movies. They have to because of the complexity! You want to purchase “Back to the Future”, but you can’t find a K-Mart, which is the sole provider of Universal Pictures content sold on HD VHS. There is a Blockbuster nearby, but they only have Orion Pictures content on Laserdisc and you only have a DVD player, so it looks like you won’t be watching “Terminator” either. It looks like you’ll have to find a Suncoast Video. They sell Paramount Pictures’ DVD format. Maybe “Star Trek IV: The Voyage Home” can do the trick.

This is basically where we are heading with unique solutions for every content provider and distributor. Seriously – this is bananas! Consumers are being forced into specific platforms and options only available in certain locations. You have to stand on your head and chant 3 times to watch one movie and shake your leg in the air to watch another. For crying out loud, I can’t even purchase Big Hero 6 in 3D in the US, but I can rent it! Disney, just take my money, will you?

The Solution
As simplistic as it may sound, it apparently needs stating. All content distribution providers should have all the content they can from other content providers. This is the value they bring for now. Only then can they compete and offer unique services to enhance the content consumption piece. In the future, additional content that could be tailored via a paid experience through a content distributor could set them apart and reduce piracy (for example, HoloLens content).

The problem is, whoever manages this content kingdom will rule everything and everyone wants a piece of it. This is likely why Verizon is even taking another crack at it. So right now, consumers are stuck with too many expensive options because everyone believes their content is best and worth the money. The fact remains though that there is not one solution to rule them all, which means multiple subscriptions for customers from multiple content providers that have become distributors themselves. All the while, the entertainment industry is wondering why people pirate content.

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First post! BAM!

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