What will Australian consumers pay for 100Mbps with the NBN?

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Last night SBS World News ran a segment on the Australian National Broadband Network plan, including Prime Minister Kevin Rudd and the leader of the opposition debating its merits, and a piece on how much broadband is likely to cost consumers, which took some snapshots from an interview with me.

Unfortunately the small quote they took from me and its positioning in the story seemed to imply that I thought that $100 per month was acceptable pricing. Here are the points that I made while I was being interviewed:

* While some analysts have suggested that consumers will have to pay $100 per month for broadband access to make the project commercially viable, there are highly questionable assumptions in their methodology.

* Consumer telecoms pricing has been and will increasingly driven by bundling and integration with value-add services. As I pointed out yesterday, telcos need to shift to value-add services, including content, and this will drive how services are priced.

* People will be prepared to pay a little more than they currently are for vastly superior services. Not three times as much, but a little more.

* The pricing of any service is only meaningful in a market context. Pricing has to be set relative to demand and competitive alternatives rather than the cost of provision, and the landscape for broadband offerings is rapidly evolving.

* The Australian government, if required, is likely to effectively subsidize consumer broadband access. There is no reason to think at this point that it will be necessary, but if so this will likely be an investment that will yield substantial and commensurate economic and social returns.

* This all comes back to the politicians’ argument as to whether commercial entities will want to invest in the project, which is clearly fundamental to its success. The government says they will, the opposition says they won’t. While there is still a lot of number-crunching to be done, my bet is that there won’t be a problem getting investors, not least because there will be significant strategic benefits of being involved in this project. Let’s see.

Eight key issues in understanding Australia’s National Broadband Network

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Yesterday was a busy day. I was called early to come in to the Sky TV studies to respond to the government’s announcement from its National Broadband Network tender, got stuck in traffic and arrived half way through the announcement, and was then immediately put on Sky Business live TV to give my thoughts. I was then interviewed on the separate Sky News program, a multitude of radio stations, and my comments ended up appearing in the New York Times, Forbes, and The Guardian among other global press, fitted into a busy day of work commitments.

So just now getting a chance to write a few quick thoughts.

1. Overall this is an exciting and very promising move.

If one of the bidders had won the tender it would have been a fizzer. 12mbps by 2012? That would probably not have kept Australia at its middling to poor ranking in global broadband connectivity. Fiber to the home and 100Mbps to 90% of premises is worth playing for, and could provide the connectivity that will drive Australia’s economy forward. I have long argued that for a geographically isolated country such as Australia living in what is truly becoming a global connected economy, connectivity (both the infrastructure and the attitudes) are fundamental to our future. I now have more reason to be optimistic about our country’s future than I did early yesterday.

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Why major media will quickly resume buying innovative companies

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The latest research from specialist investment bank Jordan Edmiston shows that M&A activity in media, information, marketing, and technology sector fell by over 90% year-on-year in first quarter 2009. While the figure seems dire, much of this is due to this being a phase of rapid price adjustment, as Jordan Edmiston points out. First valuations at new levels need to be clarified by further transactions.

The chart below shows the most active strategic acquirers over the last five years in the sector. Some of these – such as Thomson Reuters, Reed Elsevier, and WPP – will continue to be very active in years ahead. Other companies will start acquiring more rapidly.

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Availability of talent drives entrepreneurial innovation – the story of Silicon Valley unemployment

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The human toll of unemployment is stark, as is being experienced around the world.

The most recent unemployment statistics for Silicon Valley below illustrate how the region has greater cyclicality in unemployment than almost any other region in the US. In good times unemployment can fall to almost nil, in bad times unemployment rises faster and higher than most regions.

SVunemploymentFeb09.jpg

The recent dramatic upturn in unemployment is likely to be far from peak, with for example the mooted IBM – SUN merger potentially leading to 10,000 layoffs, a large proportion of which would likely be in Silicon Valley.

What is bad news for some is great news for others. Bringing ideas to market takes talented people. In good times those people are either not available, or cost too much for start-ups to engage. Today there are once again fantastically talented people who are looking for opportunities, and willing to work for lower – or even no – income in return for a share of what might become big later.

This balances out to a large degree the far more constrained availability of investment capital. The money may not be flowing into start-up companies at a massive pace, but they need less.

So don’t expect innovation in Silicon Valley (or anywhere else) to dry up. The spigot of one of the key enablers of innovation – talent – has just been turned up high. Entrepreneurship is being democratized as more people with ideas and energy are able to execute their vision, rather than being constrained by lack of resources.

This is just one key driver today resulting in the pace of technology innovation going up, up, up…

Six key insights into the future of the Direct Selling Industry

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One of the things that I love the most about my work is that I’m continually exposed to new ideas, new people, new places, and new industries.

Last week I gave the opening keynote at the Direct Selling Association of Australia annual conference. The theme of the event was “Defining our Future,” so they wanted to kick off with big picture perspectives on the future of business from a leading futurist. My presentation at the conference is here.

I had never been exposed to the industry before, however in preparing for my keynote, and at the event itself where I came in for the cocktail reception the night before and stayed on for the CEO panel following my keynote, I gained a number of insights into the industry and where it stands today.

The Direct Selling industry is comprised of three major segments: personal or door-to-door sales, such as the classic Avon model; party plan, for example Tupperware; and multi-level marketing (MLM), exemplified by Amway. All of the models rely on face-to-face interaction and relationships.

The industry definitely has image issues. My general observation is that there are undoubtedly some in the industry who contribute to that perception, however any who are successful in the long-term are absolutely ethical and genuine. Distribution based on face-to-face relationships is absolutely a valid business model and economic sector.

Here are some of the things I learned or observed about direct selling:

1. Economic downturns can be great for direct selling.

What drives the industry more than anything else is the availability of talented people becoming distributors. When unemployment rises, people seek new ways to make money. The increase in motivated distributors can outweigh lower sales per individuals to create higher revenue.

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Announcing The Insight Exchange – transforming the events industry!

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As announced a few hours ago on Twitter, Beth Etling and I have today launched a new events company, The Insight Exchange.

It’s a major step for both of us. I’ve been organizing events in various forms for the last dozen years, and started doing it more seriously three years ago, when Future Exploration Network launched the Future of Media Summit. Since then Future Exploration Network has organized the Future of Media Summit annually – which is a major production since it’s run simultaneously in Sydney and San Francisco – and we’ve also set up and run for the last two years both Enterprise 2.0 Executive Forum and Web 2.0 in Australia.

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Twitter on ABC TV – the impact on politics, media and socializing

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ABC (Australian Broadcasting Corporation) TV had a very nice segment on Twitter yesterday, as below.

As befits the august institution, the segment was more thoughtful than some other recent media coverage.

It begins with how politicians are using Twitter, including Barack Obama, Australian prime minister Kevin Rudd, opposition leader Malcolm Turnbull, and South Australian state premier Mike Rann, who announced his new cabinet on Twitter, and talks about how he embraces it as a way of communicating with his electorate.

The segment then looks at how Twitter is becoming a media channel, including providing breaking coverage of events such as the Mumbai terrorist attacks and Australian bushfires, and quotes me saying that many news events are covered first and sometimes better on Twitter than on mainstream media.

On the segment ABC Managing Director Mark Scott says that most Twitter sources cannot be trusted, so people will look to credible sources such as the ABC, possibly delivered over the ABC’s own Twitter channel.

This approach just takes us back to the traditional view that news is only news once a journalist has reported it. In part of my interview that wasn’t used in the segment I noted that people are increasingly looking for primary sources for news. They are not interested in waiting until the broadcast journalists get to the scene, and they feel capable of assessing the validity of these unauthorized sources themselves.

The segment wraps up mentioning Twitter’s search for a business model.

Visualization: Social bookmarking in the enterprise

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In our Implementing Enterprise 2.0 report, we created visual representations to help explain how the most important social media tools can be applied inside organizations.

The diagram below was used in the chapter on social bookmarking, which was designed to accompany the detailed coverage in the report, but it is hopefully fairly self-explanatory!

Go to the Implementing Enterprise 2.0 downloads page for several free chapters, including the chapter on social networking on the enterprise, with its own diagram on how social networks relate to other Enterprise 2.0 tools.

Please let me know your thoughts and feedback on improving these diagrams for future versions of the report. I’ll post more of these visualizations on this blog in coming weeks.

socialbookmarking_diagram.jpg

Pilots as a key instrument for improving organizational performance in a complex world

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I caught up this afternoon with Chris Bayley of Buffalo Canyon Consulting and we had a very interesting conversation about Web 2.0 in organizations. Chris asked me about the role of pilots, and in our ensuing discussion I refined my thinking on this a bit.

Examining how to run pilots plays a significant role in our Implementing Enterprise 2.0 report, with a full chapter on pilots and many aspects of our coverage of user adoption related to pilots. The center of our Enterprise 2.0 Implementation Framework is ‘Iterate and Refine’. Pilots and agile methodologies are critical to the ability of organizations to do that. Some companies are good at piloting, but many need to shift their attitudes and approaches to enable effectively establishing, managing, supporting, and closing down pilot projects.

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Implementing Enterprise 2.0: Free Chapter 4 – Key benefits and risks

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Continuing our series of free chapters from Implementing Enterprise 2.0, here is Chapter 4 on Key Benefits and Risks. For full details on the report and all the sample chapters go to the Implementing Enterprise 2.0 website.

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As shown in the Enterprise 2.0 Implementation Framework above, understanding the potential benefits and risks from Enterprise 2.0 that are relevant to the organization is critical to being able to engage in the cycle of value creation. These benefits and risks vary substantially across companies. Initiatives must be designed to draw out the greatest potential benefits, and fully address potentially risks and concerns. Chapter 7 on Governance, also available as a free download, examines how the understanding of the risks and benefits are applied in creating an enabling framework for the organization.

The Key Risks and Benefits chapter contains:

* Assessing the relevance of risks and benefits to your organization

* Table of key potential benefits of implementing Enterprise 2.0

* Table of key risks and concerns in implementing Enterprise 2.0

* Risks of NOT implementing Enterprise 2.0

You can also just download the pdf of Chapter 4.


Implementing Enteprise 2.0: Chapter 4 – Key Benefits and Risks