This article first appeared on October 26th, 2012. Microsoft has now introduced Windows 8 and its Surface tablets. Instead of having menus constantly cluttering up your screen, many of the menus in Windows 8 are hidden and appear after you swipe your fingers across the screen in a particular way. Here are four key gestures you’ll need to remember: Swiping your finger from the right edge of the screen to the middle will reveal a menu that has search, share, devices, settings and a shortcut to your Start screen. Swiping your finger from the left edge to middle of the screen will bring up a list of all the apps you have open at the moment, allowing you to switch between them. Swiping your finger from the top edge to the middle will bring up a number of options for the app you’re running – sort of like the menu bar at the top of a window in Windows 7. Finally, swiping your finger from the top edge to the bottom of your screen will close the app that’s currently open.
Recently, Old Taskmaster looked at freemium pricing as a possible pricing model for your business. In short, the idea is you give away part of your product for free, with the expectation you will persuade your customer to purchase a value added extra. For example, you might have heard the phrase “there’s no such thing as a free lunch”. It comes from a practice in New Orleans during the 1970s of offering customers a free counter meal item with any drink they purchased. While the drinks did not cover the cost of the meal, the saloons prospered on the fact that customers would purchase two or three drinks at inflated prices with their meal, more than covering their meal cost. For the publicans, as in life, there indeed was no such thing as a free lunch. Of course, while it might be feasible to give a customer a free counter meal, what if your product is too expensive to viably give away for free? What if your margins are already razor-thin? This is when we start talking about razors and blades. In 1901, an entrepreneur named King Gillette from Fond du Lac in Wisconsin noticed most barbers used razors with large, bolted-on blades. They had been nicknamed “cut-throat razors” for their propensity to wound the customers of a barber with a less-than-steady hand. And just think, you say you work in a “cut-throat” industry! Cowards! Anyway, while the handles remained sturdy, the blades quickly dulled, requiring regular sharpening. Being the entrepreneurial sort, King Gillette developed a new type of razor. These featured a razor handle with an easily replaced blade. Far more revolutionary than his blade design, however, was the design of his pricing structure. Gillette sold his handles at a significant loss in order to secure as many customers as possible. Where Gillette made his money was in the sale of blades, which were sold at a significant premium. By purchasing the handle, customers were effectively locked into purchasing several blades, which more than covered the subsidy on the handle. Today, Gillette’s razor and blade pricing model today is applied to a number of industries. For example, that cheap little ink-jet printer on your office desk was sold to you at a considerable subsidy, like a razor handle. The ink cartridges it uses, like Gillette’s blades, are sold at a significant premium. Once you’ve printed a few documents with ink more expensive per litre than crude oil, it turns out the total cost of ownership is higher than you anticipated. Likewise, it’s not feasible to give away plane tickets for free. However, low-cost carriers sell tickets on the cheap in the hope you’ll pay a premium for using a credit card, having extra baggage or enjoying an in-flight meal. Similarly, your kids’ PlayStation or Xbox is, at its core, a computer powerful enough to play graphics processor-intensive games. It’s also sold to you at a subsidised price – but Sony or Microsoft extract a licensing fee for every game they sell. Optus will sell you an $899 Samsung Galaxy S4 smartphone for just $17 a month for 24 months, or $408. Oh, but you’ll also need a $50 per month plan, which means it’ll cost you a total of $1608 by the time 24 months are up – nearly double the cost of the phone. And the cinema sells you tickets for roughly the extortionate price the Hollywood studios and distributors charge them for public exhibition of their film. However, if you want some popcorn or a choc-top during the show, be prepared to pay. You get the picture. As the publicans of New Orleans discovered well over a century ago, in life there’s no such thing as a free lunch. However, if that model doesn’t work for your industry, consider giving your customers a subsidised razor – and sell them the blade at a profit. So can the razor-and-blade model work in your industry? Even in a cut-throat industry, Old Taskmaster says it’s worth considering. Get it done – today!
This week in Barcelona, the GSMA – the peak global standards body for the mobile phone industry – is hosting its annual industry trade event, the Mobile World Congress. The MWC is arguably the largest annual event in the telecommunications industry. It brings together carriers with mobile phone makers, equipment makers and app developers. It’s where handset manufacturers make the big pitch to mobile carriers for the year ahead. A strong presentation can bring your products to the attention of mobile carriers the world over. Perhaps more than the Consumer Electronics Show in January, the MWC is the big event where mobile phone makers unveil their new smartphones and other products for the year ahead. This year’s event certainly hasn’t underwhelmed, with major announcements from some of the industry’s biggest players. It’s time to take a look at eight of the biggest announcements from this year’s show: 1. Samsung Galaxy S5 Samsung is now easily the biggest handset maker in the industry. According to IDC, for the full year of 2013, it shipped a massive 313.9 million smartphones worldwide – that’s three out of every 10 smartphones shipped anywhere in the world. Forget about Apple versus Samsung, it’s not even a race anymore at this point. Apple shipped 153.4 million units in 2013, meaning that for every handset Apple shipped, Samsung shipped more than two. In fact, with the exception of the US and Japan, Apple is not even really competitive with Samsung anymore. That race was lost two years ago. In addition to manufacturing smartphones, it also supplies itself with almost every component, from batteries and processors to cameras, memory chips and displays. It is both the world’s second biggest chip builder, and the world’s second biggest ship builder. So when Samsung unveils its main, flagship smartphone for the year, you better believe that everyone in the industry – from carriers to competitors – is watching very closely. This year’s flagship, the Galaxy S5, was largely an incremental improvement on its predecessor, with the South Korean tech giant confirming speculation the new device is both dust-proof and waterproof. Needless to say, both Telstra and Optus have already announced they’re carrying the new smartphone. Aside from the Galaxy S5, Samsung shocked the industry when it snubbed Google for the latest version of its Galaxy Gear smartwatches. Instead of Android, the new devices will be powered by its own operating system, known as Tizen. 2. Microsoft’s Nokia X smartphones – powered by Android For nearly two decades, Microsoft’s Windows operating system had battled an open source rival, known as Linux. While Linux has struggled to make inroads in the desktop PC market, it has emerged as the dominant operating system for servers. Linux also forms the basis of Google Android, which competes head-to-head with Microsoft Windows Phone. Meanwhile, in September last year, Microsoft bought the mobile assets of Nokia, along with a licence to use its patents, for $US7.2 billion. In light of this, there was some scepticism when rumours first surfaced that Nokia was gearing up to release a series of smartphones powered by Android. At MWC, Nokia confirmed the rumours by unveiling a new smartphone product line powered by Android called the Nokia X series. The new devices will come with Microsoft’s cloud-based apps and services pre-installed and won’t come with the Google Play app store. Nonetheless, when Microsoft takes control of Nokia in April, it will be selling a consumer product based on Linux. Who would have thought it? 3. Facebook buys WhatsApp for $US16 billion A week before the MWC, Facebook announced it is taking over mobile messaging service WhatsApp for an incredible sum – $US16 billion. With both WhatsApp co-founder and chief executive Jan Koum and Facebook founder and chief executive Mark Zuckerberg delivering keynote speeches at MWC, the tech world was certainly going to pay attention. During the keynote, Koum did not disappoint, announcing WhatsApp was launching free voice calls through its app during the second quarter, once the takeover by Facebook has been completed. No doubt some of the mobile carriers were a little edgy about the prospect of Facebook launching an all-out assault on their lucrative voice call and text message businesses. 4. Mozilla unveils a $25 smartphone This year’s Mobile World Congress marked the one year anniversary of the debut of Mozilla’s smartphone platform, Firefox OS. For those unfamiliar with the platform, Mozilla is best known for its Firefox web browser. Last year, it announced it was creating a mobile operating system based on Firefox that would compete head-to-head with Google Android, Apple iOS, Windows Phone 8 and BlackBerry 10. In Firefox OS, all apps basically work like interactive websites and are coded in web standards, including HTML5 and CSS. Since this is less demanding than running a “full” operating system with apps, the theory went that Firefox OS would perform well on low-end devices aimed for emerging markets. In practice, some of the first Firefox OS smartphones, including the ZTE Open, have left a lot to be desired. As I explained in Control Shift last week, Mozilla’s expansion drive has left it in a precarious position in the marketplace: As if the situation weren’t already urgent enough already, Mozilla’s lucrative deal with Google expires in November of this year. In a sense, it’s fitting that [Mozilla founder Mitchell] Baker has taken up trapeze as a hobby, because Mozilla’s in the middle of a high-wire act. It might be that, over the coming months, one of Mozilla’s growing number of Firefox OS-driven side-projects gains traction in the market place. However, it could also backfire spectacularly, endangering its main source of revenue in the process. Aside from the seven new smartphones on display, Mozilla also announced that a smartphone costing just $25 would hit the market this year. Given that, up until the fourth quarter of last year, more than half of all mobile phones sold worldwide were still featurephones, mostly in emerging markets, the $25 phone might just be the big hit Mozilla’s looking for. Story continues on page 2. Please click below. 5. Major updates for BlackBerry enterprise customers BlackBerry chief executive John Chen’s bid to turn around the fortunes of the smartphone pioneer were filled out in a series of major product announcements at MWC. Up until now, enterprises using BlackBerry Secure Work Spaces on BYOD (bring your own device) smartphones needed to use different versions of BlackBerry Enterprise Service (BES) depending on whether staff used newer BlackBerry 10/Android/iOS devices, or older BlackBerrys. That has been cleared away with the release of BES 12, in the process clearing away many headaches for IT administrators. As an added bonus, it supports Windows Phone devices too. The company also unveiled a new flagship phone with a full keyboard called the Q20 and an enterprise version of its BlackBerry Messenger service called eBBM Suite. 6. At least Sony’s new products are water-tight Earlier this month, Sony announced it is selling its VAIO PC business to investment firm Japan Industrial Partners, spinning off its Bravia TV business into a separate subsidiary and slashing its global headcount by 5000 as part of a major restructure. At the time, the Japanese tech giant announced it’s setting its sights on the smartphone, tablet and wearables markets for its future growth. Suffice to say, the company is hoping it delivered a hit with the products it unveiled at MWC. The company unveiled a new flagship smartphone called the Xperia Z2, a 4G Android 4.4 KitKat smartphone powered by a 2.3 GHz quad-core Qualcomm processor. The company is proclaiming its 20.7-megapixel camera capable is the most ever used in a waterproof smartphone. Which I’m sure is fantastic news for scuba-diving photographers. The company also unveiled a 10.1-inch tablet called, imaginatively enough, the Z2 Tablet. The tablet is being marketed as the lightest ever used in a waterproof tablet. Finally, the company unveiled a smart wristband called the SmartBand. 7. Opportunity knocks for LG? The highlight for LG was an update of the KnockON security system called “Knock Code”, which uses a series of knocks rather than a password to secure a device. The new feature will appear on the LG G Pro 2 phablet, a new six-inch phablet set to go head-to-head with Samsung’s popular Galaxy Note devices. The company also unveiled its “L Series 3” range of low- to mid-range smartphones at the show. That said, most of LG’s big announcements came at the 2014 Consumer Electronics Show in Las Vegas in January, including its LG Lifeband Touch activity tracking bracelet, LG Heart Rate headphones, and webOS-powered smart TVs. 8. Tickets please! With the rapid growth of mobile ticketing, it’s no surprise the world’s largest telecommunications show would embrace NFC tickets. Telstra was one of a range of carriers to trial NFC badge technology for tickets to this year’s event. The badges use information stored by a mobile carrier, including name and telephone number, to help verify an attendee’s identity. The validation process also includes a photo ID check. This year’s show also features an NFC Experience demonstrating NFC-based mobile commerce systems for payment, retail, transport, mobile identity and ticketing/access. In addition, there are 61 NFC-enabled Tap-n-Go Points providing event news, schedules, documents, presentations, videos and other information. According to figures published by ABI research, in the next five years, 34 billion tickets to be sent to mobile devices,. In terms of technology used to authenticate tickets, the figures show 48% will rely on QR codes, near-field communications (NFC) will be used on 30%, while SMS or other technologies will be used on 22%. If the forecast is accurate, it suggests using our smartphones to touch on for events, public transport or entry into secure areas could soon be a part of everyday life.
When two-year-old Envato received a firmly worded legal letter from tech juggernaut Adobe in 2009, the team thought their business was over. “We were terrified. It was just, oh my god our company is about to be demolished. Terrible things are going to happen and our world was rocked,” co-founder and business intelligence director Vahid Ta’eed told StartupSmart. Launched in August 2006 by four co-founders in Sydney, Envato was originally called Flash Den, after their first marketplace that connected buyers and sellers of Flash content. Despite registering a logo including the word “flash den” when they launched, they didn’t attempt to trademark the word until 2009. This is probably what triggered Adobe, which owns the trademark for “Flash”, to send the young company a sternly worded letter. “We got a concerning, and I would even say ugly, letter from Adobe’s lawyers. I still remember reading it, my heart was beating crazily and sweating,” Ta’eed says. According to Ta’eed, the letter informed Flash Den of a series of legal consequences if they didn’t change their company name, website and trademark swiftly. “They were a massive company. It felt like the Borg had come and we were about to be devoured,” he says. (For those who may not watch Star Trek, the Borg are an alien race that forces other races into their collective by turning them into cybernetic organisms.) Flash Den was managing four marketplaces with a team of 15 who had worked hard for two years to build their brand. “We worked through the panic. At first you’ve just got to get past the denial and anger, but then we realised we wanted to switch away from just selling Flash anyway, so maybe a forced branding change wasn’t such a bad thing,” Ta’eed says. They renamed that particular marketplace and their business from Flash Den to Active Den, which enabled them to include emerging technologies such as Microsoft’s Silverlight. They negotiated with Adobe to keep the Flash Den domain for a few months so they could redirect users to their new site. “We’d spent two years and didn’t want to just vanish,” says Ta’eed, adding the Adobe team were actually pretty good about the situation after their first exchange. The team decided to be transparent about the issue and communicated the brand change through a concerted PR effort that included stories in TechCrunch and the Washington Post. “We’d moved beyond just Flash, but we were still that brand, bolted onto that word. To move beyond it was challenging but as a start-up you do what you have to do,” Ta’eed says. The plan had always been to build a portfolio of marketplaces selling online content such as website templates and stock photography. Armed with a deeper understanding of trademarks and a more nimble approach to branding, the Flash Den team went on to explore new company brand names. They originally explored the possibility of rebranding to Eden but abandoned that plan due to the difficulty of trademarking a common word. In 2010, they bought Envato for about $1000 out of a catalogue of brands, complete with the brand, domain and first logo. “I remember when we picked it; I wasn’t convinced we seemed like an Envato. But now it feels like we’ve always been this,” Ta’eed says. Armed with a new brand, they went on to launch four new marketplaces. The team never took any external funding. “Being entirely self-funded is pretty cool. You get to make your own decisions and your own mistakes, which you learn from and live with,” Ta’eed says. Envato now employs over 100 people in Melbourne, with another 100 scattered around the world. In seven years, they have paid out over $140 million in payments to the marketplace “authors” or content creators.
Telstra confirms talks with Google over Australian Chromecast launch: What app developers need to know2:16PM | Tuesday, 11 February
Telstra has confirmed it has entered into early stage talks about a potential Australian launch of Google’s Chromecast digital media player, which retails in the US for $US35. Introduced in the US alongside Android 4.3 JellyBean in July of last year, although yet to see an official Australian release, the Chromecast is a digital media device that plugs into the back of a TV and resembles a USB stick in its form factor. It allows users to view music and videos from selected online services, including YouTube, Google Play Movies & TV and Google Play Music, through their TV set. The Chromecast can be controlled from a compatible Android smartphone and tablet, and was originally introduced as a replacement for the company’s ill-fated Nexus Q set-top-box. A Telstra spokesperson told StartupSmart the telecommunications giant is looking at the device, while cautioning talks are still at an early stage. “We are always looking at ways we can bring brilliant and innovative entertainment experiences to our customers and so will always explore and consider new technology that can deliver that,” the spokesperson said in a statement. “There are no ‘secret talks’ with Google – we speak to Google all the time about all sorts of things. “As we have said we are taking a look at it – but very early stages – if it’s a product/device that we will stock we will let customers know.” The news comes just days after Google opened Chromecast up to developers, releasing an SDK (software development kit) for the device, which is available for download through the Google Cast website. In a post on Google's official developers' blog, Google engineering manager John Affaki explains some of the device's functionality for developers, in creating apps that play back audio or video, as well as for other potential purposes. "You have many options for displaying content on Chromecast. For simple media applications, you can use the default media player that can play back HTML5 media content. You can also customise it with your own branding and style using CSS. "For non-media applications, or for more flexibility and design options, you can build your own custom receiver application using standard web technologies. With a custom receiver you can build virtually any application while including support for many [video] streaming protocols, including MPEG-DASH, HLS, and Microsoft Smooth Streaming, all of which are available in the Media Player Library." Affaki is also keen to explain the developer kit contains a range of pre-written libraries, making it easy to stream content from pre-written apps to the device. “To make it easier for you to provide an optimized user experience on the TV screen, we have created sample apps for Android, iOS and Chrome. For Android, you’ll find a Cast Companion library to make your integration of Google Cast even easier. "The Google Cast SDK is simple to integrate because there’s no need to write a new app. Just incorporate the SDK into your existing mobile and web apps to bring your content to the TV. You are in control of how and when you develop and publish your cast-ready apps through the Google Cast developer console. The SDK is available on Android and iOS as well as on Chrome through the Google Cast browser extension.”
Especially if you’re an inventive sort – not an unreasonable guess, given you’re reading StartupSmart – there can be a temptation to take two successful inventions and combine them. Now, there’s a place in this world for tools that do many things. Your humble correspondent always carries around a Swiss Army knife, for example. But, while convenient for those times you need a cross-head screwdriver in a hurry, your average Swiss Army knife makes neither a great magnifying glass, nor a great pair of scissors. Don’t get me wrong, there have been cases where combining two different inventions into one can be useful. After all, the smartphones in our pockets are basically PDAs with mobile phone capabilities tacked on. What sets smartphones apart is the combined functionality – being able to send data or make calls from PDA-style apps – fills a useful purpose. But, more often than not, combining two different inventions means you end up with a splayd, or worse, a Microsoft Surface! Seriously, what additional use case is filled by combining a laptop and a tablet that you couldn’t fill better with a proper laptop and a tablet? None! Now, earlier this week, Old Taskmaster was watching the Super Bowl while cheering on the winning team – capitalism – when an ad perfectly illustrating the point came on the TV: So are you toying with the idea of combining two different products into one? Before you do, think through about whether any additional benefits are gained by combining the two inventions. You don’t want to create a doberhuahua! Get it done – today!
Are you thinking about developing an Android or iPhone app? Perhaps you have already established a business and remain a mobile sceptic? Or maybe you are looking for a good business idea? If so, it’s time to take some inspiration from one of the world’s pre-eminent experts on mobile, Tomi Ahonen. Who’s this Tomi Ahonen character, you ask? He was a senior executive at Nokia back in the ‘90s, the good ‘ole days when the Finnish mobile phone giant dominated the planet. Since leaving the company, Ahonen has become an outspoken critic of the now-former Nokia chief executive, Stephen Elop, and the company’s recent Windows Phone 8-powered smartphones. If you carried a Nokia 3210 in your pocket back in the late ‘90s, it was partly due to forward thinking Finnish engineers and executives like Ahonen. Amongst many other achievements, he oversaw Nokia’s 3G Research Centre and wrote the first industry white paper on bringing internet services to mobile. Back in the golden age known as the late ‘90s, Ahonen foresaw that online services on mobile would be used in a fundamentally different manner to how it is on a desktop computer. It’s a theme he discusses in greater depth in his book The Seventh Mass Media, which argues mobile is the seventh and most recent of a series of fundamentally different media forms, following print, recordings, cinema, radio, television and the internet. See, these days, Sonny Jim Crockett, it’s common sense to assume that your desktop website will work differently to a well-designed mobile site. Not so, back in the ancient days of the internet. Heck, right up until recently, Microsoft’s Steve Ballmer was still insisting mobile devices were just PCs in a different form! But that’s another story! Anyway, during the video, Ahonen lists nine unique benefits of mobile. They are: 1. It’s the first personal media form. 2. It’s (almost) permanently connected. 3. It’s always carried. 4. It has a built-in billing system. 6. It has the most accurate audience info of any media. 7. It captures the social context of consumption. 8. It enables the eight mass media: Augmented reality. 9. It’s a digital interface to the real world. What implications do these nine unique benefits have if you own or are about to start a business? How should you optimise your business for mobile communications? And why does mobile matter for business in the first place? All is revealed in this video. Your task for today is simple. Watch it: Get it done – today!
Microsoft, the University of Melbourne and the Victorian government have joined forces to open an $8 million research centre for social new interactive technologies that use voice, touch, gesture, gaze and physical movement. The Microsoft Centre for Social Natural User Interface (NUI) Research will have funded positions for researchers exploring the social uses of technology that enables digital products to use physical human engagement more intuitively and naturally. NUIs, such as Wii game consoles and Xbox Kinect, moved away from the desktop and mouse to use direct physical engagement such as capturing voice, gesture, touch and even brain recognition with sensors that interact with technologies. Centre director Professor Frank Vetere, who also heads up the Interaction Design Lab at Melbourne University, told StartupSmart the centre would push the emerging field of NUI design towards reaching its social potential. “The recent explosion of social media shows the extraordinary human desire to use technology for our own personal needs and interaction, so there is definitely a growing role for social NUIs,” Vetere says. “The centre is not just about the fun stuff like Facebook. It’s also the way we’re social in the workplace, in schools, in hospitals, and how we relate in public spaces.” This is Microsoft’s first NUI centre focused on the social uses of the emerging technology. Vetere says there is ample opportunity for Australia to become a leader in this emerging tech industry. “Clearly this is an opportunity to extend the thinking and knowledge happening elsewhere. We’ve got enormous strong support with Microsoft, so we can clearly leverage and contribute to their wider NUI work,” Vetere says. The research centre is intended to explore the emerging field of how technology can encourage positive social and collaborative behaviours. Resources have been allocated for three years. In a statement, Microsoft Research vice president Tony Hey said the three-way partnership was great news for achieving their goals. “This is a world class research centre, located at a world class university in a forward thinking state,” Hey said. “I am confident the centre will open the floodgates to innovative social uses of NUI. The potential for social NUI will only be limited by our imagination.” The 28 supported academics and PhD students will have the opportunity to spend time at other Microsoft research centres such as Cambridge, Beijing, and Redmond in the US.
The tech sector has always been hyper-competitive, and never has this been truer than in 2013. For the likes of Twitter, Samsung and Google, the harvest of 2013 was bountiful. However, from the perspective of Nokia, Microsoft, BlackBerry or the PC industry, it was a year to forget. Here’s a look back at 10 of the big events and trends that shaped the tech sector in 2013. 1. One billion smartphones sold this year – and counting The most important tech story of 2013 didn’t take place with a major product announcement or a Steve Jobs-style keynote speech. Instead, it took place without fanfare at an ordinary mobile phone retailer somewhere deep in suburbia. It was there that a consumer decided to purchase the one billionth smartphone to be sold during 2013. To put that number in perspective, it is projected that 227.3 million tablets shipped worldwide during 2013, 158 million television sets, 180.9 million portable PCs and 134.4 million desktop PCs. Meanwhile, figures from market analysts IDC show smartphones also outsold featurephones worldwide for the first time in history during the first quarter of 2013. What this means is that while smartphones now account for more than half of the 418.6 million mobile phones shipped worldwide each quarter, there are still millions of old-fashioned featurephones being sold each year. Especially in the low-end of the market and in emerging economies, that means there’s plenty of extra room for growth in the future – especially at the low-end of the market. Make no mistake about it. The smartphone industry is big – far bigger than the PC or TV business. And it’s only going to get bigger in 2014. 2. Google Android and Samsung: The juggernaut rolls on The biggest winners from the spectacular, ongoing growth of the smartphone market have been Samsung and Google. Last year, smartphones running Google Android outsold Apple. In 2013, that trend morphed into total industry domination. For example, of the 261.1 million smartphones shipped worldwide during the third quarter of 2013, 211.6 million or over 80% ran Google’s Android operating system. That compares to just 33.8 million iPhones, representing around 12.9% of the market, and a measly 3.6% for Windows Phone. Samsung managed to ship 72.4 million smartphones during the second quarter of 2013 alone, representing around 30.4% of the market – more than double Apple’s sales during the same period. Those device sales also mean increased component orders flowing through the various divisions of the South Korean tech conglomerate, which manufactures everything from semiconductors to batteries and smartphone displays. The growing strength of the South Korean electronics behemoth is demonstrated by its advertising and marketing budget, which has been estimated at around $US14 billion worldwide. To put that figure into perspective, as of 2011, North Korea’s entire national economy was estimated to stand at $US12.385 billion. 3. The PC industry bloodbath While Google and Samsung have had a stellar year in 2013, the same certainly can’t be said for the PC industry. The September quarter was the sixth consecutive quarter of falls, according to Gartner, with shipments falling to 80.2 million units for the quarter from 87.8 million a year earlier. Figures released by IDC forecast PC shipments for the full year to fall 9.7% in 2013. More alarmingly, it appears the emerging middle class in China, India and Brazil aren’t keen on buying computers, with total PC shipments in emerging markets expected to drop from 205.2 million to 185 million this year. Australia and New Zealand led the trend, with a massive 21% year-on-year fall in shipments for first quarter in Australia, along with a more astounding 27% fall in New Zealand. The implosion of the PC market was disastrous for a number of PC makers, including Dell, HP and Acer. In August, HP announced a major shake-up of its senior management team after announcing a large 15% year-on-year drop in net earnings and a 22% drop in revenue from consumer devices during its quarterly results. That same month, Dell reported a massive 72% year-on-year collapse in quarterly earnings, while a consortium including founder Michael Dell, Silver Lake Capital and Microsoft successfully fought off high-profile investor Carl Icahn’s bid for control of the company. And at Acer, founder Stan Shih made a surprise return as interim chairman and president, following the resignation of former chief executive JT Wang and president Jim Wong after the company recorded a record third-quarter loss. The resignations came after Acer announced its consolidated revenues for the third-quarter of 2013 fell 11.8% year-on-year to $US3.11 billion, resulting in an operating loss of $US86.6 million. 4. Surface falls flat On top of falling PC sales and 3.6% Windows Phone market share, the news was dire for Microsoft on another front in 2013. Late last year, Microsoft launched its Surface series of tablets as a first step towards making devices, with the company believed to have manufactured around six million units. The release of the Surface instantly made Microsoft a direct competitor to many of its already struggling PC partners, straining relations in the process. Fast forward to July of this year when Microsoft announced a massive $US900 million writedown on its inventory of unsold tablets. The writedown came less than a week after Microsoft announced a large price cut of $US150 for the struggling product line. Adding insult to injury, Microsoft also revealed it has spent $US898 million advertising the tablets, while only generating $US853 million in sales. According to many leading analysts, the company was believed to have sold just 1.7 million of the six million tablets it had built. To put those numbers in perspective, Apple sells around 14.6 million iPads each quarter, while Samsung sells around 8.8 million. 5. Steve Ballmer resigns During the 1990s, Microsoft was undeniably the 800-pound gorilla of the tech industry. Then, in January 2000, founder Bill Gates stood aside as chief executive, in favour of Steve Ballmer, in order to focus on his philanthropic efforts. Since then, the company has lost much of its former dynamism, and has failed to become the dominant player in a range of new technologies that have emerged since then, including search, tablets, smartphones or social media. In August last year, Vanity Fair magazine journalist Kurt Eichenwald ran a feature exploring why Microsoft fell behind its rivals. A management technique called stack ranking was almost universally blamed. “If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, two people were going to get a great review, seven were going to get mediocre reviews, and one was going to get a terrible review,” a former software developer told Eichenwald. “It leads to employees focusing on competing with each other rather than competing with other companies.” Add the low market share for Windows Phone, poor sales of the Surface and the PC industry bloodbath, and it became clear something had to give at Microsoft. In July, the company announced a major management restructure, with the company’s strategy shifting to focus on “devices and services”. Then, just one month later, Ballmer resigned as chief executive, with stack ranking dumped as a management technique soon after. The Redmond, Washington-based tech giant is currently searching for his replacement. Story continues on page 2. Please click below. 6. Nokia sold for a song Soon after Ballmer’s resignation, the news was overshadowed by an even bigger story. In September, Microsoft announced it was buying Nokia’s smartphone and devices businesses for $US7.2 billion, with the Finnish telecommunications company retaining its Nokia-Siemens services network equipment business and the Nokia brand name. The deal came after Nokia announced its smartphone sales had slumped 27% year-on-year during the second quarter of 2013, with an overall loss of €115 million ($A190 million) for the quarter. The sales plunge was led by the company’s Windows Phone-based Lumia smartphone unit, where shipments fell 27% from 10.2 million units during the second quarter of 2012 to just 7.4 million for the same quarter in 2013. To put that number into perspective, it was a little over one-tenth the number of smartphones sold by Samsung during the same quarter. It was an inglorious end to a company that absolutely dominated the mobile industry through the 1990s and 2000s. As recently as 2010, when Apple sold 47 million smartphones, Nokia managed to sell 104 million. According to prominent industry analysts, such as former Nokia executive Tomi Ahonen, the fateful moment came in February 2011, when then chief executive Stephen Elop made the decision to switch its smartphones to the Windows Phone operating system. Soon after, a leaked internal letter from Elop known as the “burning platform” memo likened the company’s situation in the mobile phone market to a person standing on a burning oil platform. After the takeover was announced, Elop was named as one of the top contenders for the position of Microsoft chief executive. 7. BlackBerry’s failed comeback and takeover attempt It wasn’t just Nokia that had a tough time in the smartphone market at the hands of Samsung and Google. In January, BlackBerry launched its new, all-touch BlackBerry 10 smartphone operating system. The platform, originally scheduled for late 2011, had been delayed by a year, preventing the company launching a flagship phone in 2012. The Australian launch for the first smartphone to run the new platform, the Z10, came in March at a gala event in Sydney hosted by Adam Spencer. A second device using a traditional BlackBerry keyboard, called the Q10, came soon after. While the reviews were generally positive, the new devices failed to be the big comeback success the company’s then-chief executive, Thorsten Heins, had hoped for. By August, the company formed a special five-member panel to examine takeover options after director and Canadian investment guru Prem Watsa quit the board. In its September quarter results, the full carnage was laid bare. The Canadian smartphone maker reported just $US1.6 billion in revenues for the quarter, down 45% year-on-year and 49% quarter-on-quarter. The company also revealed it sold just 3.7 million smartphones for the quarter – and less than half of those ran BlackBerry 10. Total losses came in at $US965 million, including a massive $US934 million inventory writedown against unsold stock of the company’s Z10 smartphone. The company announced more than 4500 staff layoffs, representing nearly 40% of its global workforce, while Heins bought a new private jet. Meanwhile, the company’s rollout of its Messenger app for Android and iOS was frozen due to technical issues with its release. In early November, with banks uncertain of the company’s long-term future, Watsa failed to raise the requisite $4.7 billion for a buyout, instead lending the company $US1 billion. As part of the deal, Heins stood aside as chief executive, replaced by former Sybase chief executive John Chen, with Watsa rejoining the board. Heins received a $US22 million golden parachute for his efforts, significantly less than the $US55.6 million he would have received had the sale gone through. 8. The Twitter IPO Last year, Facebook’s disastrous IPO ended in tears – followed by lawsuits. Thankfully, the outcome was not repeated when its social media rival, Twitter, listed on the New York Stock Exchange in November. After opening at $US26 per share, the company’s share price surged 72.69% in its first trading session. It closed at $US44.90 per share, before dropping slightly to $US44.44 in after-hours trading. Making the result even more amazing was the state of its balance sheet. While the tech giant has revenues of $US534.46 million and around 230 million users worldwide, it has never posted a profit. Despite this, the company now has a market capitalisation north of $US20 billion, with chief executive Dick Costolo claiming the company’s long-term investment strategy has prevented it from chasing profits in the short term. 9. iOS7, iPhones and iPads For Apple, 2013 was a solid if somewhat unspectacular year. In June, the company released a redesigned version of its smartphone and mobile operating system, iOS7, alongside a new version of its Mac OS X desktop operating system, known as Mavericks. It was the year that Apple finally unveiled a low-cost version of its iPhone, known as the iPhone 5c, alongside a new 64-bit flagship smartphone called the iPhone 5s, complete with a 64-bit processor and a fingerprint sensor. Then, in October, the company unveiled a lighter version of its iPad, known as the iPad Air. None of the products had the industry-shaking impact of the unveiling of the Macintosh, iPod, iPhone or iPad. That said, with billions in profits each quarter, a solid second place in the smartphone market and the world’s biggest selling tablet, solid and unspectacular for Apple is better than most companies could dream of. 10. Xbox One and PlayStation 4 launch Last, but certainly not least for gamers, 2013 marked the introduction of next generation games consoles from both Sony and Microsoft. Coming a year after Nintendo launched its Wii U system, Sony announced one million first-day sales of its PlayStation 4 system, but the launch was marred by a number of angry consumers taking to social media to complain about non-functional systems. Sony’s first-day sales were soon matched by the first-day sales of Microsoft’s new Xbox One system. So how will the two new devices perform over the long term? We’ll have to wait until next year to find out! This story first appeared on SmartCompany.
Workplace health and safety start-up SafetyCulture has this week closed a $3 million fundraising round. The round is made up of $1.79 million from Commercialisation Australia, $1 million from Blackbird Ventures and $210,000 from angel investors. Launched in 2011, over six million workplace health and safety inspections have been logged through the app created by Safety Culture. The app has been downloaded over 200,000 times and has over 25,000 active daily users. Co-founder and chief executive Luke Anear told StartupSmart the funding will go towards doubling its team of 38 by mid-next year. “We’re recruiting 40 new team members, about half of which will be in software engineering. We’ve had to get pretty innovative about how we attract these guys because we’re competing with Google and Microsoft,” Anear says. The SafetyCulture team is offering to relocate people from anywhere in the world, support them rent-free while they get settled and if it doesn’t work out, they will fly them home after 12 months. Anear says it’s working, as they’ve got applications rolling in from all over the world, including start-up hot spots such as the United States and Israel. Anear says he thinks the company is attractive to investors as it has built up significant traction, with very little energy invested in the product. It’s a disruptive product for a global market that’s got a lot of traction that’s been self-propelling,” he says. “We just built an app, put it in the app store and launched a website. That’s it for marketing so far.” The SafetyCulture team was surprised to discover the adoption of its enterprise software solution was being worker-driven. “We didn’t anticipate the worker-driven model. Usually enterprise software comes from the top and pushed down. But we found workers are our quickest adopters because they want to be safer at work and they’re convincing their management to embrace it,” Anear says. It’s working on a suite of complementary apps to release in the next six to 12 months. Anear adds the successful uptake of the app is opening up new opportunities. “This has now become a big data project, which we never anticipated. There is so much data in the back-end that we’re beginning to explore the uses for.”
Over $US60 billion ($64 billion) worth of investment deals were done internationally in quarter three this year, up significantly from $US23 billion in the same quarter in 2012, with the Asia-Pacific region leading the average deal value with $30.4 million. According to quarter three’s Internet Dealbook produced by Right Click Capital, 985 deals were made this quarter, down from 1248 made in the same period in 2012. In the last year, financial services and transaction related deals were up by 284%, and mobile apps up by 381%. E-commerce deals were down by 36%, and software as a service by 11%. The games industry has slumped with total deal value dropping by 90% since quarter two 2013. Right Click Capital partner Benjamin Chong told StartupSmart the data revealed some interesting target industries for local founders. “There continues to be a lot of interest in mobile apps, so the acquisition and investment amounts have gone up, but there has been a big decrease on games,” ,” Chong says. “There are some amazing success stories but it appears investor appetite for games has waned. Investors are focusing more on serious apps and those that can provide ongoing value to users.” Chong says he was surprised software-as-a-service (Saas) investment trend. “I would’ve assumed software-as-a-service would’ve trended up, so this is definitely one to keep an eye on. I’m still very positive and bullish about SaaS, as for the target business market the model of pay by month makes a lot of sense and anecdotally is taking off,” Chong says. Despite the lower number of deals made, the average deal value (over $81 million) was almost triple 2012 quarter three average (over $27 million). RightClick Capital omitted the multi-billion Verizon deal from the totals as it would skew results, but infrastructure investment boomed on the back of Dell returning to being a privately owned businesses and a series of large deals including the Microsoft-Nokia deal. “Australian founders who have start-ups who can add significant strategic value to these large companies and recent deals should explore the new partnerships to create value for themselves,” Chong says.
There is a myth that there is an inevitable path of technological advance where new, superior technologies inevitably knock off their older predecessors. It’s a myth many tech tart-ups are prone to. Build a better mouse trap and they’ll sell by the truckload. Well, to any of you holding these myths to be self-evident, Old Taskmaster has just three words to say: Amiga Video Toaster. See, back in the day when people asked “Mac or PC”, (well, Mac or IBM compatible as it was back then), there was a third option many opted for: The Amiga. Now in 1990, on the Mac side of the fence, Apple was still charging over $6,000 for a black and white Macintosh (like the SE/30). Before 1987, they couldn’t run more than one program at a time. When they finally did do multitasking, it was with a crash-prone method called co-operative multitasking. Contrary to popular myth, the first true pre-emptive 32-bit multitasking colour Mac didn’t arrive until the release of OS-X in 1999. The PC side of the fence was far worse. For those who have never experienced the "joy" of a PC running MS-DOS refusing to boot because the AUTOEXEC.BAT or CONFIG.SYS file isn’t configured correctly, just imagine the computer equivalent of root canal surgery. It didn’t get a colour pre-emptive multitasking operating system until Windows 95. In contrast, first released in 1985, the Amiga was a useful colour video editing tool. By 1990, you could hook up to four video cameras up to one and switch between them in real time: Why the name video toaster? Because it was designed to make high-end video editing something you could do on an everyday appliance. Aside from video editing, it also did 3D animation, was in full colour, had four-channel stereo sound, pre-emptive multitasking, mouse control, windows, icons and menus. It also ran many of the regular PC productivity apps, including WordPerfect. From the computer animation on television series like Seaquest DSV, to tracking NASA satellites, to running the displays at Brisbane’s Central station, to the Israeli Air Force, to – by some accounts – powering the graphics at some of the early Macworld shows and in the video production department at Microsoft, there was an Amiga behind the scenes. Even though it used the same series of processors (the Motorola 68k) as the early Macintoshes, because it had a series of separate graphics and sound processors, it was a magnitude faster and more powerful than its rivals. Yet it still cost less. However, despite all this, it failed to gain sufficient traction in the marketplace. It's time for some guru meditation on why this happened. Poor management and poor marketing shoulder a lot of the responsibility. Just like BlackBerry 10, while it was ridiculously more advanced than any of its competitors, this was never effectively communicated to the public. As a result, its demise ended up becoming a self-fulfilling prophecy. Dealers and sales reps in stores explained to customers that while indeed the Amiga was more advanced, it didn’t have enough traction in the marketplace. In turn, because those customers failed to buy it, it failed to get traction in the marketplace. Other salespeople, mostly out of ignorance, stressed the importance of getting a “serious” computer (ie an IBM PC) that could run WordPerfect (badly) but not have enough horsepower to do high-end video over one that could do both (the Amiga). The moral of the story for anyone with a tech start-up is clear. It’s just not good enough to arrogantly assume your technology or product will succeed on merit, even if it is clearly ahead of everything else in the marketplace. You need to do the hard yards in selling and marketing your product, or else it will flounder. Get it done – today!
Earlier today, old Taskmaster read about an ad by Microsoft that has been criticised for attacking Apple. Apparently the folks up in Seattle think putting the latest iPhone in a range of different coloured plastics isn’t particularly innovative. And they’d be right – Apple first offered a selection of different coloured plastics for the original iMac, back in 1998. However, what some of you young’uns might not realise is that there’s nothing new about one tech company directly naming, attacking and mocking its rivals. In fact, attack ads have been a feature of the tech sector for almost as long as they have been used in politics. Back in the 1980s, Commodore founder Jack Tramiel made it a regular feature of his advertising. From William Shatner having a dig at Atari while selling the VIC-20 to a Commodore 64 advert literally chewing out Apple, competitors were regularly named and shamed: During the late 1980s, then videogame giant Sega took Commodore’s attack ads and added ‘blast processing’. Now, whether or not blast processing exists outside a counter-terror squad investigation remains dubious. Nonetheless, Sega claimed to have it and Nintendo didn’t (or should that be Nintendon’t?). Apple is certainly no stranger to this form of advertising either. The first and best known example was the company’s now infamous 1984 ad. That said, even during their weak late 80s and early 90s period, the attacks continued: And then there’s the company’s Mac and PC ads: Like most things, Samsung has taken this concept off Apple and then begun churning out variations like sausages. Here’s one recent example: So, like many things in the computer industry, the attack ad was first developed by a company like Commodore, was quickly followed by Apple, was mass-produced by Samsung, and then Microsoft eventually had a go. And the big problem with their ad? Compared to the other examples, it’s a bit boring: The moral of the story is simple. If you want to make an ad (or YouTube clip) attacking your rivals, go for it. Just make it interesting. Even if you have to make up a phrase like ‘blast processing’ to do it! Get it done – today!
So the last article I wrote got a little bit of exposure and was by far the most successful article I've written in terms of reader interaction. I have thought about this for the past four weeks and wondered why did that article fly? While some of my other articles, which I consider to be better quality, haven't. I've basically narrowed it down to four reasons why I feel that the cloud has taken off in the public’s eyes and become a bit of a hot topic. 1. It's getting political After the election and Mr Abbott's dicing of the NBN plans – people are now either for or against the decision. Debate is now raging. I am on the raging end FYI and although people say there are two sides to every story, which I can appreciate. The simple fact of the matter is that I want faster internet, and so does the rest of Australia. 2. The cloud is becoming commercial People now want to know what the cloud is, what it does and how it can help them. Businesses want to know how it can keep their business secure and also save them money. Most of all, people want to know what people mean when they say "the cloud". 3. Big consumer companies are beginning to utilise it What do I mean by this? Quite simply, now that Apple has iCloud, Dropbox is popular and Microsoft has SkyDrive, the cloud has been introduced to home life. Now that the clouds are in homes and are seeing efficiency and success – why wouldn't larger companies decide to take on the cloud for their business? They do personally! 4. It's simply a hot topic No explanation needed here. It's simply a hot topic to talk about, just as social media was five years ago. Social media went through its ups and downs, so has the cloud. I personally see the light at the end of the tunnel for the cloud, and I love what I am seeing. So this is one of my shorter articles – I know that. I know though that the majority of people reading this article will agree with what I'm saying, regardless of whether they like the cloud or not. I'd love to see people share this article with social media and I'd love people to comment as much as they like. I would also like well-balanced judgments on my writing, but I know I probably will never get that. I'm a writer, so do I care? No. Conclusion For those that emailed me over the last month with long and drawn out emails that literally took longer to write than the article itself, I feel for you. You wasted your time. All you've done is cemented the fact that the cloud is a hot topic and worth a great debate! I'm calling on the television networks to actually discuss this and spread the word where they can! #7pmProject let's see what you guys can do! Should you wish to get in contact with me regarding this article please do not hesitate to email me at email@example.com and for those of you who would like to migrate to the cloud in an efficient and swift manner please also send me an email – I’d love to hear from you.
Although Windows 8 has quickly become a popular operating system, Microsoft has changed how some things work. One of those is privacy settings. To change your privacy settings, press the Windows Key + I, and then select "Change PC Settings". There you select the Privacy setting, and from there you can amend them to how you'd like.
Omny, an app allowing users to combine news clips, emails, social media updates and articles via voice-to-text software, launches today after over 20 months in development. Created by 121Cast, the app allows people to create their own customised audio channel. The app also includes a recommendation algorithm to suggest content. 121Cast co-founder and chief operations officer Ed Hooper told StartupSmart they were excited to see it finally launch. “Seeing how it can change people and their behaviour is really exciting, as is the opportunity make that commute period really productive all over the world,” Hooper says. “We’ve all been doing this for so long and everyone knows about it, so how this goes is tied to our personal brands, what we stand for, and our credibility.” Co-founders Long Zheng and Hooper began exploring the idea for the app in 2011. They had previously worked on an international award winning start-up involving farm irrigation automation software. “But it was the GFC and we were still students, so for a whole lot of factors it didn’t work out but it was an amazing journey,” Hooper says, who gave up studying at Stanford to return to Australia to work in the Groupon team just as coupon sales were taking off. He was working at Groupon when Zheng got in touch to talk about how to turn the issue of commute productivity into a business opportunity. “I was constantly looking for a good opportunity, but I didn’t want to jump on something unless it was awesome, because you want to put everything into it. When Long called me up and we started talking about an audio solution that read you your emails and updates, I realised this was it. I literally could not stop thinking about it,” Hooper says. Omny sources content from over 30 providers, from music apps such as Spotify, to news groups such as the ABC and BBC, to Facebook, Google and Microsoft. Hooper says all the early conversations were focused on the difficulties of developing such an app, rather than building a business around it. “Whenever we’ve spoken to potential partners or investors, the assumption is always if we can make the app work, the money stuff will be fine,” Hooper says. “The feedback we got was the idea was there and it could definitely be a business, but also that it was going to be really hard to build and we’d need significant expertise.” They brought on third co-founder and chief technology officer Andrew Armstrong in February 2012. They’ve gone on to hire a front-end developer and a data scientist as well. To guide the development, the 121Cast team launched a test app, SoundGecko, in mid-2012. “We realised we didn’t have a clear idea of what we were creating and needed some real data. We tried surveys and interviews, but it didn’t really get us there. So we took a small fraction of this app, and bundled it as a standalone,” Hooper says. SoundGecko, an app which read websites and PDF documents for users, has almost 50,000 active monthly users. It allowed 121Cast the opportunity to test the reception of voice-to-text, and also the data requirements for sending audio to thousands of users across the world. Over 210,000 people have downloaded SoundGecko on iOS, Android and Microsoft phones. “We found that managing all three platforms was quite hard. As soon as we’d launch a version, we’d see things we needed to change and there were always things we should have done on the first one,” Hooper says. “For the resources we have, it just isn’t feasible to be updating the app on all three platforms. So we’re fine tuning the iOS one while we do the core Android development.” Omny is currently a free app. 121Cast will introduce ads and affiliate marketing in the coming months, and are exploring a premium subscription for launch later next year. “SoundGecko definitely validated that people would pay for the premium features, such as more voices, and the Omny premium subscription will probably not include ads,” Hooper says. Hooper adds financial opportunities will emerge from the user data over time. In order to fund the development, the 121Cast team used their own capital and raised a series of seed investments. “We burnt our own savings and lived off them for quite a while. We decided we were going to do this regardless, and between us we could go for about a year without raising funds. Let’s just build this because we have to do it,” Hooper says. They went on to raise $250,000 from Adventure Capital and the SingTel Optus Innov8 program in November 2012; $20,000 from the University of Melbourne Accelerator program in late 2012, and just over $250,000 from Commercialisation Australia in July 2013. “With the investment, if we knew we need to do something in the future, we started building the relationship as early as possible and find out what’s important to our potential partners and match them on multiple data points,” Hooper says. Hooper says they’re focused on Australia at this stage, but will be looking to expand to the US, United Kingdom and other English speaking markets in the next few years.
Surfwear giant Billabong is walking away from a $325 million refinancing deal from Altamont Capital, instead accepting a rival bid from Centerbridge Partners and Oaktree Capital Management. The new arrangement will see Billabong repay a $315 million bridge loan facility to Altamont along with a $6 million break fee. The Centerbridge Oaktree offer will see the surfwear retailer gain a six-year senior secured term loan of $386 million, along with a further $135 million through an equity placement. "This is a turning point for the company," Billabong chairman Ian Pollard says. "We'll now be back focused on business with a clear direction [and] new leadership. I must say, I'm looking forward to it." US Federal Reserve’s stimulus announcement causes the Aussie dollar to surge The US Federal Reserve’s announcement that it will continue its bond-buying stimulus program has caused an unexpected boost to the Australian dollar. The Aussie dollar recorded its largest single-day rise since 2011 – up US1.5 cents – following the announcement as the ASX 200 surged more than 1.1%. Stephen Elop’s $US25.5 million Nokia golden parachute Outgoing Nokia chief executive Stephen Elop is set to receive a €18.8 million ($25.5 million) golden parachute if shareholders agree to sell its mobile phone division to Microsoft. Elop’s termination agreement is set to include 18 months of his base salary, worth around €4.2 million, along with €14.6 million accelerated vesting of his outstanding equity awards. The controversial chief executive has been dubbed a “Trojan horse” by sections of the Finnish media. Overnight The Dow Jones Industrial Average is down to 15636.6. the Aussie dollar is up to US94.40 cents.
Freelancer.com’s $US400 million takeover offer from Japanese recruitment company Recruit Co has attracted plenty of attention. It’s a hefty chunk of money for a company that grew out of chief executive Matt Barrie’s garage. If the $US400 million offer for the global online outsourcing platform is accepted, it’s likely to be one of the biggest technology company deals done in Australia this year. Here are some of the top technology deals in Australia in the past 12 months whose dollar value has been reported, from data compiled by Charles Lindop of KTM Capital: 1. M2 Telecommunications and Dodo Australia, Eftel In March this year M2 Telecommunications bought phone and internet provider Dodo Australia and telecommunications infrastructure company Eftel for $248 million. M2 said in a statement at the time Dodo and Eftel were highly complementary to its “sizeable” consumer division. “The acquisitions are an excellent complement to our consumer division and combined, our business possesses an excellent capability to grow our share of both the consumer and small to medium business market,” M2 chief executive Geoff Horth said. 2. Corporation Service Company and Melbourne IT Melbourne IT sold its Digital Brand Services division to US-based Corporation Service Company for $152.5 million in March. DBS provides online brand protection and consultancy services to global organisations. “While this was not a business that we had specifically earmarked for sale, given the value creation provided by the transaction, this was an opportunity which could not be ignored,” Melbourne IT chief executive Theo Hnarakis said in a statement. 3. William Hill and tomwaterhouse.com UK betting giant William Hill took a punt on bookmaker Tom Waterhouse’s online business last month in a deal that could be worth up to $104 million. Under the deal, William Hill paid $34 million up front, and a potential further $70 million if certain earnings targets are met. “International expansion is a key part of William Hill’s growth strategy and making Australia our second home is our priority,” William Hill chief executive Ralph Topping said in a statement. 4. iiNet and Adam Internet Internet provider iiNet offered to buy South Australia-based Adam Internet for $60 million in August. Telstra had tried to buy Adam but was thwarted by the Australian Competition and Consumer Commission. “We believe that this transaction provides real benefit to Adam Internet’s customers and staff as it aligns them with iiNet, Australia’s leading ISP in customer service,” Adam’s chief executive Greg Hicks said. 5. Webjet and Zuji Travel booking website Webjet snapped up fellow online travel agency Zuji for $25 million in December last year. Webjet managing director John Guscic told SmartCompany the deal represented a unique opportunity to substantially expand Webjet's marketing footprint, particularly in Asia. “We've known Zuji since its inception and we know they’ve built out a very attractive business in Asia and we have a desire to expand into the Asian markets and Zuji has given us the platform to achieve that,” he said. 6. SMS Management & Technology and Indicium In July SMS Management & Technology bought IT infrastructure and managed services company Indicium for $22 million. SMS CEO Tom Stianos said in a statement at the time: “The acquisition of Indicium supports our growing Managed Services and Infrastructure Consulting capability, and meets our strategic imperative to increase our annuity revenue. This is a high growth segment of the market and Indicium will accelerate SMS’ offer of managed services in the cloud market.” 7. Woolworths and Quantium The supermarket giant took a 50% stake in Quantium, Australia’s leading data consultancy, for a reported $20 million in May. Quantium said in a statement it would provide a “wide range of data, analytical, media and software services to Woolworths as well as help deliver customer insights to Woolworths’ suppliers”. And where would the Freelancer.com deal rank among deals in the world? Pretty highly according to data compiled by Australian investment firm Right Click Capital. While it’s nowhere near the $US130 billion deal Verizon Communications has made to buy Vodafone’s 45% of Verizon Wireless this month, or Microsoft’s $US7.2 billion takeover of Nokia, it’s not far off the €360 million ($US477 million) paid by French payment solutions provider Ingenico for online payment provider Ogone in January.
The software industry has taken a leap for joy this morning after the New Zealand government announced it would abolish certain software patents – and local experts say we should follow suit. The abolition of software patents is a long-running issue in the developer community. Although traditionally used to protect copyright, critics say patents have become so general and broad they are effectively useless. Now, major companies such as Samsung and Apple have used patents as tools in litigation to win royalties – leading to the creation of entire entities dedicated to buying patents and suing for profits. “There is no doubt the current patent system is antiquated,” the chief executive of incubator Pollenizer, Mick Liubinskas, told SmartCompany this morning. The New Zealand government passed a bill to ban software patents this week, with the vast majority of MPs in favour of the motion. In a release, commerce minister Craig Foss says the bill marks a “significant step towards driving innovation in New Zealand”. Critics of the patent system say they stop companies from developing new projects based on other ideas that should essentially be taken as very basic innovations. Liubinskas says it’s time the Australian government investigated making a similar motion. “If you manage intellectual property protection the right way – and not through patent protection – you can do a lot to really drive innovation,” he says. “It comes back to the question of whether we want to put entrepreneurs first. How much do we want to drive entrepreneurial innovation? Do we want to put our foot down and be a world leader in this area?” In New Zealand, the Institute of IT Professionals says the patent system doesn’t work for software, because it is “almost impossible for genuine technology companies to create new software without breaching some of the hundreds of thousands of software patents that exist”. This is the main problem cited regarding patent infringement in the United States, where major companies including Apple, Microsoft and others have applied for patents that are extremely general. For example, last year Apple filed a patent application on a graphical user interface that can “display electronic lists and documents”. “Apple’s patent covers UI modules covering blogging, email, telephone, camera, video player, calendar, browser, widgets, search, notes, maps and more importantly, a multi-touch interface.” Liubinskas says for entrepreneurs to do their best work, they need freedom – which is why the system needs to be changed. “We’ve incremented to ugliness, and so the only way we can actually get anything done is to blow the whole thing up.” This story first appeared on SmartCompany.
Troubled surfwear retailer Billabong is ignoring calls by the Australian Shareholders’ Association to delay its deal with Altamont in order to properly evaluate a rival offer from private equity firms Centerbridge and Oaktree. “It seems to us you can't proceed and lock up one proposal that you say will be complete by October (when Billabong has flagged a shareholder vote) and properly evaluate another at the same time,” ASA chairman Ian Curry says. “It feels like Billabong is going to take the position it is too late to proceed with any new offers.” However, a Billabong spokesperson rejects the ASA’s demand, telling The Australian the company’s priority is to find the fastest path to certainty for employees and shareholders. “Is it really going to benefit the business and the 6000 people employed globally to go through another six months of due diligence, management discussions and the like? This also has costs,” a Billabong spokesperson says. Murray Goulburn calls for improved access to finance for agriculture Murray Goulburn Co-operative general manager of shareholder relations Robert Poole has called on the banks to forge alliances with overseas investors in order to finance the agricultural sector. The call comes as the co-op, which trades under the Devondale brand, launches MG Partnerships. “A lot of the banks are still funding agriculture like they did in the 1950s and 60s, with 50% equity and mums and dads borrowing money," Poole says. “That is, I think, going to rapidly change; and I think the banks are going to be involved in that or they are not, because the external capital is inevitably going to come. “Overseas investors are taking a more positive long-term view of agriculture than what a lot of local banks and superfunds are.” Microsoft chief executive Steve Ballmer announces resignation Microsoft chief executive Steve Ballmer has announced plans to resign within the next 12 months, ending a controversial 13-year reign at the helm of the tech giant. “There is never a perfect time for this type of transition, but now is the right time," Ballmer says in a statement. "This is an emotional and difficult thing for me to do. I take this step in the best interests of the company I love." Microsoft’s share price rose 7% following news of the resignation. Overnight The Dow Jones Industrial Average is up to 15010.51. The Aussie dollar is up to US90.29 cents.