On Convergence

Transatlantic Misunderstandings: Google loses Belgian Case

A few weeks ago, there was some half-amused excitement in web circles about a conflict between Google and Belgian newspaper publishers. The publishers had accused Google of violating their copyrights by linking to their content from Google News.

Google now actually lost the resulting case in a Brussels court. The company was ordered to remove all Belgian newspaper content from Google News and from its search cache, and in addition to that, Google has to pay a fine of 25,000 Euros per day, totalling several million Euros.

The last part shouldn't be that hard on the rich search engine giant, but understandably Google is a worried afraid that this court decision could set a precedence for similar lawsuits in the rest of Europe. Still, most Americans can hardly believe that a small country like Belgium dares to attack the king of Internet search, and that newspaper publishers would be so stupid to have their sites removed from Google.

In my opinion, this discussion is afflicted by two pretty fundamental misunderstandings:

• First of all, online advertising doesn't have the same importance in continental Europe as in the US or the UK. Therefore, its importance is not the same for newspaper publishers, and the Internet traffic coming from the large search engines is by no means as relevant as it is for an English-language newspaper website. American and British newspapers would be stupid to sue a search engine, since their increasingly important online revenues are largely driven by Google and its competitors. But that's not true for many European countries.

• The economic power of newspaper publishing companies is very different depending on the country's market situation. Google so far experienced most of its legal trouble in francophone countries where newspapers play a comparatively minor role in the national advertising markets. Belgian newspapers get about 23% of the total ad spending in their country, French newspapers only about 17%. That's a far cry from other countries where newspapers are much stronger, such as Switzerland (52% of ad spending for newspapers), Germany (43%) or Sweden (55%). In those countries, newspaper publishers feel a lot more relaxed about search engines, since they know that their strong national newspaper brands can only benefit from Google's traffic. But in the weak newspaper markets, a desperate economic situation seems to lead to desperate legal measures.

Since newspaper publishers of course have major political and social influence in their respective country, Google shouldn't be too optimistic about the outcome of possible further lawsuits of the same kind. But again, not all of Europe is the same. And Google still has time to approach newspaper publishers proactively to strike a deal that works for both sides.

What's behind the Consumerization of IT?

The IT industry has a new favorite buzzword: Consumerization. According to this concept, more and more innovation in the IT sector is driven by the consumer market, not by enterprise customers.

It's not something that just a few entrepreneurs and VCs have made up. Even the analysts at Gartner -- the high priests of enterprise IT -- acknowledge the trend and encourage CIOs to experiment with consumer IT products. The shift to hardware and software originating in the consumer space, Gartner says, can't be stopped anyway. And many VCs now ignore the enterprise sector outright and invest only in consumer plays.

So who are these consumer, anyway?

Like most buzzwords, consumerization of IT is quite an oversimplification as a concept. It suggests that there is a completely separate world of non-professional IT users that have completely separate needs. As we all know, that's not the case. Most consumers are people who use IT every day at work. They have come to expect a high level of reliability and functionality from IT products, and that doesn't change as soon as they go home after work. But at the same time, they expect the stuff that they use at home to be more fun, easier to set up and simpler to use. Is it surprising that this in turn influences the expectations that they have about enterprise IT?

What's more, many trends in the so-called consumer space are actually driven by people who use IT for professional purposes, but outside of traditional enterprise structures: freelancers, writers, creative professionals, startup employees. For instance, many of the supposedly consumer-oriented Web 2.0 software products and hardware accessories are actually used by this type of user. They don't have access to cheap IT support and don't want to spend a lot of money, so simplicity is key.

So, maybe the consumer space really should be defined as "people using IT in the absence of an IT department".

The center of digital life

What was a home computer good for 15 years ago? Not much, maybe a bit of word-processing and some bookkeeping, a bit of education and some simple games. The most adventurous users would maybe connect a modem and dial in to some bulletin board systems.

How times have changed. The home PC now is a communications center (when was it that everybody started to use e-mail?), the gateway to the world and its information. It's rapidly becoming the main source for media content and news. It's the thing that we use to organize our pictures and our music, edit our home movies and express ourselves creatively in many other ways. And it's a fantastic game console.

Typical home computers used to be at the lowest end of the PC market, just barely powerful enough to handle some basic computing tasks. Now go to Dell's web site and look at the gaming machines. They are far more powerful than all but the most expensive corporate server machines. And all this power actually makes sense for games and digital media applications.

That's one main reason for customerization: The corporate desktop PC simply has run out of applications that need more power. How much more speed do you need to write some Word documents or run the ERP client software? Not so in the digital home: Every increase in CPU and graphics speed is very noticeable for today's home computer applications, so home computers drive innovation.

Make it simple, stupid

Corporate IT departments are not the best advocates of simplicity. And why should they be? After all, if IT people want to keep their jobs, it doesn't hurt that users need a lot of support and that there are glitches to repair. Management asks for progress and efficient processes, so IT rolls out more and more features on ever more expensive infrastructure. And IT vendors are of course happy to help. Who cares that users don't want and need all this complexity and will never use this expensive stuff?

But it doesn't work like that in the consumer market, where people spend their own money and their own time on technology.

I recently bought a Mac Mini, maybe the prototypical consumer computer in today's market. I was shocked. It just worked. It didn't waste my time with endless installation routines, virus checks and driver downloads. When I connected my printer, it did nothing. Or to be exact, it just installed it in the background, without bothering me. Again, it just worked. Not like my PC (that runs the operating system with a "Professional" in its name) where the same process would have cost me at least ten minutes.

The same experience is typical for many of the best Web 2.0 applications. They give you good functionality without the overhead of traditional desktop applications. They are instantly available and do not require any training. Of course, they are by no means perfect. But they're simple, easy to use, and cheap or free. They're an elegant solution to a well-defined problem and not more than that. But also not less.

What's in it for everybody?

Antoine de Saint-Exupéry once said: „Technology always develops from the primitive via the complicated to the simple."

Few people would disagree that traditional enterprise IT is complicated. And expensive. And unnecessarily complex. Sure, it tries to solve complex problems. But is that always the most effective thing to do? Maybe it would be more rational to first solve the simpler problems in a more cost-effective and user-friendly way. Of course, IT professionals are perfectionists. But they tend to optimize the wrong dimensions. Consumers behave differently, because they are willing to forgo functional perfection in exchange for simplicity and cost-effectiveness.

Could consumerization be the big step to a new era of simple, elegant IT? That's absolutely possible. It's not surprising that this trend is driven by consumers that are savvy (because they are at the same time experienced professional users of IT) but are also not willing to put up with high costs and complexity in their private lives.

Who will be the winners? Well, consumers, obviously, and the companies that build the best products for them. But achieving real simplicity is very hard, and there are some very complex things behind every simple user interface. Just look at Google's infrastructure or Apple's iPod business model. Those that can handle this complexity and hide it behind a pretty facade will be the biggest winners, both in the open market and in the world of enterprise IT.

Mobile Media Usage: What Happened to the Digital Revolution?

Currently I take the Boston subway (the T) every morning during rush hour to get to MIT. Over the last few weeks, I counted how many people use which type of media on their daily commute. Obviously, these observations are by no means statistically representative, but still interesting.

On a typical day, about 70 people ride on a subway car. The average media usage is as follows:

• 10 people read a book.
• 2 people read a "normal" newspaper (Boston Globe, New York Times etc.)
• 1 person reads the Wall Street Journal
• 43 people read the free daily commuter newspaper (Metro)
• 7 people listen to their iPod, and most of them read something at the same time. Other types of MP3 players are rare, and very infrequently you see somebody with a -- gasp -- portable CD player.
• 2 people type on their BlackBerry.
• 5 people consume no media at all, not counting the ad displays they're staring at.

Apparently, the free commuter newspaper has a marketshare (including iPod multitaskers) of over 70%. In contrast, the situation for traditional newspapers looks somewhat sad. Maybe people read a "real" newspaper at home, but considering the average age of commuters (about 35) I suspect that traditional newspapers have lost this customer segment.

Not many surprises so far. But here is what I find remarkable:

• 0 people read a e-book
• 0 people consume content on their mobile phone
• 0 people use portable game consoles
• 0 people use a Ultra-mobile PC or something similar

So far, digital media are only present in the form of iPods and a few BlackBerries. Good old print media still dominate the scene.

I just wonder who is actually using all the great convergent gadgets that the electronics industry tries to sell. I can't think of a much better place for this type of gadget than a subway ride, and Boston really isn't a city of luddites, as far as I know.

Probably there a few good reasons for this non-usage:

• Convergence overload: The latest mobile devices are able to do simply everything. And that's too much. Obviously, devices with a clear focus (iPod, BlackBerry) are much more successful.
• Device babysitting: I personally would like to have a mobile blog-reading device that automatically pulls down my favorite feeds every morning. The content simply should be there whenever I want to access it, without the need for any activity on my part and without waiting times. We're far away from this. In most cases, content synchronization is a major pain that only works with frequent user interventions. Again, Apple has demonstrated how to do this in the right (i.e. simple) way.
• Format and DRM chaos: The songs that I bought on iTunes don't play on my Nokia mobile phone. "Blink" is available as an e-book only on MobiPocket, "The World is Flat" only on Adobe Reader. The industry apparently expects me to install three or four competing e-book systems on my various devices, and even then I can't use all content on every device.
• Lack of reliablity: Bad battery life and unstable software are still a problem. The e-book software on my PDA frequently forgets what book I was just reading and where I was in that book. I really wonder if this vendor's emplyees ever use their own product.

The (mobile) digital revolution is still at its very beginning, and it's not moving very fast. And that's mainly the vendors' fault. I think consumers are open for many things, but not willing to put up with all these annoying imperfections.