The Conjungo Blog

For a number of years I ran a company that had created software used to monitor people’s computer activity across a network and the internet. It was fantastic software and while it might seem ‘old hat’ now, it could achieve what none of the competitors could do at that time.

It would alert in real time against any given criteria of words so if for example the word ’sex’ or ‘bomb’ was used, an alarm would be flagged. You could achieve this against most apps such as email, webmail, chat, attachments including PDFs. You even see exactly what the user was seeing e.g. a film, web page etc. Furthermore you could generate an audit trail of who sent what to whom, when, how etc. You could also search historic data for compliance purposes against users, keywords etc. Very, very clever stuff indeed.

Unlike traditional ‘blocking’ software it wouldn’t alert and stop an email with the word ‘Essex’ in because it picked up on the letters ’sex’ as the problem we found with Government, was that some departments needed to search on a term such as ‘breast’ purely for medical reasons, but access was blocked so while a disciplinary offence in some departments it was actually a major requirement in others.

At the time, monitoring people’s activity at work was sometimes considered politically incorrect and potentially a breach of human rights. I was interviewed many times by quite often some very well known journalists and accused of encouraging censorship. My belief was that people can do what they like at home on their own PC, but at work, well wasting time surfing for porn was in my book not acceptable especially when you consider that directors can be held personally responsible for the behaviour of their employees. This means that a director could be held liable for a defamatory email sent from one person to another.

It seems only fair that a company takes reasonable measures to protect itself and directors. More to the point, if such measures had been taken by MCI and other companies in the late 1990’s and early 2000’s, then perhaps many peoples’ pensions would have been protected by the criminal events that then transpired. There is always another story and if you can prevent a wrong-doing, that can only be for the good.

I have believed in the ‘free market’ and in the least amount of regulation as possible. Unfortunately you can not account for people’s behaviour. We’ve seen that with banks in very recent times. Without regulations people will lose out. It pains me say but unfortunately we have no choice. The problem is how far do we go to legislate against certain behaviour? We’ve seen the problems with too little legislation but too much legislation can be an inhibitor to business.

The Chinese government has decreed that all new PCs should be installed with filtering software to ensure that users will behave in a certain way.

Frankly, like most right minded people I think this has gone too far. To prevent certain actions and activity is appalling. The UK government backed down on its plans to monitor and record all of our emails even personal ones. The storage alone would have been vast let alone the political ramifications. That said; don’t kid yourself as we are perceived to be the ‘Mother of Democracy’, as we are the most heavily monitored country in the world. But I guess we still have the choice to say and behave (within reason and the bounds of the law) as we wish. 

You can of course read more about this subject in ‘Go Understand Content Filtering’. It’s a good read.

Apple’s CEO Steve Jobs has retuned to work after an ‘alleged’ liver transplant. You may or may not be aware that Jobs was suffering from cancer a year or so ago and this will hopefully resolve his health issues.

Jobs is an icon in our industry or should I say icon. The original developer of the Mac and the range of products that have proved to be so iconic themselves. Of course there was the original range of Macs or as they should be referred to, the Apple Macintosh, so loyally used by people in the graphics and media world. Then of course the development and launch of the visually stunning and cost effective iMac. From there we’ve seen the development of various mp3 players and of course the iPhone. Technology is not typically an area that generates huge amounts of enthusiasm or indeed passion, but Apple always has. People always seem to queue for hours just to buy the latest incarnation of an Apple product and the recent launch of the third generation of the iPhone was no different.

Why is this?

When other new phones are launched there might be a ripple of enthusiastic anticipation but it never matches that of Apple. Ditto with a new laptop or PC.

A lot of this is because the products are good – very good. Well made, easy to use but most of all, beautifully designed. Our Chairman has recently bought a new Apple notebook. So has one of our non-execs. They look stunning (the Apples that is…). People used to be wary of the Mac. When I was at BT, the division for which I worked all used Macs. It was good, there was no difference to me between that and a PC. I could still run the usual Windows apps, access CRM and accounting functions. The only difference was that there was only one mouse button, not the usual two.

Apple set themselves apart by their design and innovation. The next time you go to a store that stocks the Apple range of computers, you will be staggered at how well designed and ‘different’ they look. Elegant.

Then compare to the usual range of PC hardware. Dull, boring, uninteresting, tedious. Lacking flare and design. They of course meet a purpose and are good at what they do. You would think that the other manufacturers would have done something, at least reacted years ago with the launch of the original and innovative iMac. They didn’t. PCs and laptops all look the same. You will now sometimes see the occasional laptop that has a different colour case or a little bit thinner than the others. How difficult can it be to design something just a little different, something that sets itself apart from the usual. Apart from a badge, laptops look all the same but you’ll always spot a Mac.

Ironically I don’t have one, but given the choice again (given budgets), I would chose one every time for that reason alone.

I wish Mr. Jobs good health and many years of continued innovation at the helm of Apple.

In my last blog I referred to ‘me too’ products. This I’m afraid, got me thinking. You see while I always state that Conjungo is unique (and I genuinely believe that it is), we are a sub-set of search and search marketing. There have been for many years now many different search engines that basically achieve the same results. So while Conjungo is not a ‘me too’ product, we are a sub-set of search and we achieve what no other search engine can (if you don’t believe me, try).

There can not be gradations of uniqueness – it either is or isn’t unique. Full stop.

From a technological and innovation perspective, this means that we live in a pretty boring and clinical world. I state this because when or what was the last product or invention that you came across that was/is truly unique?

It was exciting when TV went from black and white to colour. When the video was invented (DVDs while a big step forward are merely a sub-set of video technology). There was space travel in the 1960’s and the landing on the moon. The invention of the PC. The internet. All of these in some way changed our lives. Perhaps even the invention of the router because this made possible the development and the ability to harness the potential of networks and the internet. I actually think that since then, everything else has been a sub-set of the internet or products developed around it. There are numerous antivirus products, many different types of firewalls, web-filtering products, need I go on?

So while there have been huge amounts of innovative major milestones achieved through the genius of many, many people, there has not been for an awfully long time a development that is so profound that we sit up and say ‘wow’. When you hear of a new product where you absolutely have to phone a friend and say ‘have you heard of this - it’s going to change our lives’. Actually probably the last one was ‘Viagra’, I kid you not, (but not for me you understand…).

I watch the gadget show and all the toys are really an improvement on another idea – a development of existing technology. It will be lighter, smaller (larger and thinner in the case of TVs), better quality etc. but never ever anything actually new. I guess the iPod was in many ways but even this was more about design than about innovation. You could already buy an MP3 player albeit not as elegant, or in the 1980’s the Sony Walkman which enabled people to listen to music on the move, so perhaps not.

You could argue that Facebook and the whole notion of social networking is a milestone (some might describe it as a millstone…) or even Skype. Perhaps this is because I’m older and more cynical or perhaps it is because we expect so much more before we are truly in awe of something new because we have become so accustomed to new developments and innovations. I suspect not. I hope that we continue to innovate and not just improve and develop on existing ideas and platforms. Perhaps we have run out of things to invent. Perhaps we are too lazy and lack the will and motivation to invent.

I do enjoy the feedback we get about Conjungo. It does for many have that ‘wow’ factor but I really wish there were more innovative products; real, genuine and unique.   

Microsoft has just launched a new search engine under the name of Bing. It is in Beta in the UK and while I would genuinely love to say that I’ve looked at it and I think it’s incredible, I’m afraid I can’t. It looks nice, returns results, does what it is I guess, meant to. The problem is - will I and anyone else make that move from Google? No, simply because it isn’t compelling enough and if it is, it certainly hasn’t been articulated.

You see, the problem with Bing is that I can’t see any advantages to using it. If I knew, then I might change. So, Microsoft being Microsoft, in its wisdom thought that by merely announcing the latest incarnation of their already failed search tool, that people would use it. We’re Microsoft for goodness sake. Everyone loves us. Clearly not.

I’ve been involved in a number of new product launches mainly of ‘me too’ products and the owners will always get defensive when described as such. Understandably so, but the point comes then which has to be questioned is, if you’re not a ‘me too’ product how do you differ? This should lead to a list of all new features and functions, advantages and benefits where one is better than the competitors. It’s called proper marketing.

That said, while the good people at ‘big brother’ Google won’t be losing any sleep, I suppose it’s good to have competition. Microsoft have 5% of the search market while nowhere near as capacious as Google, it must still yield a fair old revenue stream. I hope that they have done this for strategic and business purposes and not just because of egotistical ones.

Bing will be fine but will never catch up Google simply because Google is embedded in most people’s psyche. Google is now an adjective as well as a noun. I can’t ever imagine anyone saying “I’ll Bing that”. Doesn’t work really.

I wrote the other day in my blog that I would discuss the first round of site statistics from Conjungo. As I said, they were far, far better than I had even dreamed of simply because I guess I had set a low expectation thereby mentally setting the bar low so that anything higher than a couple of thousand hits would be an event. It is akin to meeting an old friend that perhaps you have not seen for twenty or so years. You expect to recognise them but also factor in a few more chins and a great deal less hair (greying). An old friend that I saw after some 15 years described me as looking ‘prosperous’ – he’s being diplomatic. 

Well the news is that we have been averaging just a tad over 600,000 hits per month (1.8 million in three months), with 70% of visitors putting Conjungo into their ‘favourites’ folder. The average amount of time that people are spending on our site is around ten minutes.  Now, let’s face it, you aren’t going to spend that amount of time on any website unless it’s relevant and interesting. Furthermore you won’t bookmark a site unless you intend to return. Our ‘Go Understand’ content is averaging some 1,500 visits each, per month.

Of course we have to keep up the momentum but our outreach programme now includes IDG’s Techworld and Channel Pro so we continue to grow from strength to strength. I will, of course keep you posted about future developments.

It’s been a good week. We’ve had our quarterly stats for Conjungo published and they are better than in my wildest dreams! In fact and this is true, if I was asked in an ideal world and with a following wind what I would really like to see, we’d have still have beaten those figures. But I’ll discuss that data in my next blog.

Furthermore, McKinsey & Co., the highly respected management consultancy have just published a report that I am delighted to say (some might say rather smugly), supports our contention that business people don’t understand technology while naturally technologists do. As a result there is a schism between the two. McKinsey propose a model that addresses this gap between those that run businesses and those that run IT departments.

http://www.computerweekly.com/Articles/2009/05/12/235982/firms-need-technology-annual-report-mckinsey.htm

The result is that non technologist won’t necessarily appreciate the benefits that technology brings to their organisations, such as making them more agile and increasing efficiency. I have to say that I’ve been espousing this in our GO Understand technology section. I do appreciate that McKinsey are coming at this from a slightly different angle in that they suggest the need to “extract business value from technology but also substantiate that analysis with hard metrics”. So they are suggesting what we have been doing for some time, is the need to demonstrate the need for technology, the benefits that can be derived and “Examples and anecdotes (of the contribution from technology) will make the numbers come alive.”

Furthermore, “The basic problem is a lack of shared understanding. Our business unit leaders have only a vague sense of the value the technology organization delivers: they just see bits and pieces and don’t seem to grasp the interdependencies. It’s understandable that they get upset when things go wrong, but it’s less understandable that they hesitate to invest time and energy to sponsor solutions. Our technology leaders, for their part, often fail to address issues in ways that businesspeople find meaningful and therefore lack credibility when they try.”

McKinsey employ some of the finest minds in the world so we must be doing something right………

A copy of the report is available from here.

“Only the little people pay taxes” - Leona Helmsley

It’s been two weeks since the budget. I thought last week that I’d avoid that subject and return to it later. So here we are.

My opinion hasn’t changed even over two weeks and I am sure that you can guess what it is.

We seem to have reached some form of economic impasse. Taxes are now ridiculously high though I feel compelled to say that I have very little sympathy for the quote ‘luvvies’ that stated that if tax goes above 50% then they will leave the country, because it is they who are getting up early, working hard and as a result are paying for the unemployed. Frankly, it doesn’t generate much sympathy. Most unemployed don’t want to be. These ‘luvvies’ actually don’t need to work i.e. they are minted but they want to be the centre of attention and so continue to ply their trade.

Please don’t get me wrong, I’m certainly not a supporter of tax increases, I just don’t have a great deal of respect for those that complain. You see, the really rich will find a way to hide their money. The entrepreneurs that this country so badly need will simply and quietly move abroad without whinging and generate much needed capital for another economy who will welcome them with open arms. I do feel very sorry for those professionals and entrepreneurs who have worked hard to achieve what they have, such as surgeons, architects and head teachers who can earn more than £150,000 per annum but don’t have such choices. That’s why this is such a cynical move. Even more so, the UK now has a deficit of £750 billion. Raising the tax threshold will actually generate £2 billion…big deal.

So what is this impasse? Well, interest rates are at their lowest level at 0.5%. However, if you want to borrow or take out a loan (assuming that you can actually get one), you’ll be paying roughly 8.5% in interest. Likewise, if you are a saver you’ll probably get 1.6% (and yes I know there are better deals but they’re based on long term deposits). So we are not encouraged to save and we are not encouraged to spend.

As a friend of mine who runs his own business, said to me last week, “I would like to buy a new car but why should I pay such high interest rates. I would like to buy a new network and a CRM system, but again, I’m not encouraged to do so.”

Taxes should have been cut. Why? It has been proven that low taxes mean higher tax receipts simply because people can’t be bothered to ‘hide’ their money from the taxman. People with badly needed cash will come to our economy and spend their dosh. Lowering taxes means that people will not feel so fearful of losing their jobs, they will have more to spend. However, as it stands as unemployment continues to rise, tax receipts will further decline because the unemployed won’t be paying tax but the Government or actually ‘we’ will continue to support the unemployed; not that I have an issue with that because it’s the Governments fault. So it’s a vicious circle. 

We needed a programme to encourage investment, a programme to encourage spending, a programme that will allow companies to buy the technology they need and hence allow the economy to grow.

Many years ago, there was a well know furniture retailer known for its low cost products. They bought in a large amount of stock of mahogany dining tables and chairs. They were incredibly cheap and no one bought them. They continued lowering the price and still no one bought them. Then one day, one of their bright young marketers suggested doubling the original price because the perception in the market was that you can’t buy such products so cheaply. Well, they doubled the price and the stock was soon sold out.

Sometimes you have to make big, bold decisions but it takes flair and leadership to do that.

There’s some interesting stats in this years’ UK Search Engine Marketing report.

Some of the key findings that have an impact upon our market are:

• Company respondents were asked whether they expect budgets to increase or decrease over the next 12 months across a range of digital marketing channels. Search engine optimisation is the area where companies are most likely to be investing more money, with 55% of respondents expecting an increase in their budget.
• Paid search budgets are also much more likely to be on the increase, adding further credence to the theory that businesses are turning to online channels where there is measurable return on investment.
• The picture is least positive for online display advertising, although there are still more organisations (24%) who are increasing budgets than there are companies cutting back (16%).
• Approximately half as many responding organisations (44%) use Yahoo, whilst a third (30%) are using Live (Microsoft’s platform). Yahoo has taken the biggest hit since last year’s survey, with 5% fewer company marketers now using Yahoo for paid search. Similarly, 7% fewer agencies say their clients pay to advertise on Yahoo’s search results pages.

So what does this all actually mean? Well, as you would expect, there’s good and bad news, naturally with the current economic conditions. You can of course interpret stats to meet your needs if you so wish and while some companies are cutting costs the overall picture looks positive i.e. 55% of those companies taking part will be increasing budgets for this kind of activity and this appears to be a consistent theme that while some lower budgets, in the main, budgets are being increased.

So, get your cheque books out then, Dave and I are waiting for your call…

The press have been predicting doom and gloom again over the past couple of weeks. I guess the reason for this is that there is very little other news to talk about.

The Budget will be announced this week and no doubt taxes in some cases will rise and Government spending will have to be cut in order to somehow manage the deficit. The problem occurs of course is that while the Government aim to stimulate the economy on one hand generally by propping up the banks, who as far as I’m concerned are merely civil servants under a different guise. They rarely have any entrepreneurial experience and so can only rely on financial models that they apply to a business. Ironic really that they invest in sub-prime markets and mess up and when they have the opportunity to generate long term growth, they seem unwilling to do so. I appreciate that this is a generalisation but it makes me feel better for saying so. The point being is that the Government have been ‘investing’ in the banking system in order to improve their liquidity on the assumption that they will spend money/invest/lend. They’re not.

So there is now a possibility that Government will cut spending that will further exacerbate the recession and raise taxes which will have the same effect. Funnily enough, high earners will be impacted too if there tax rises from 40% to 45%. That’s 5% less spending power!

But I digress. Forrester, Gartner, IDC et al all, are predicting lower spending on IT.

Nothing new there then. However that’s at a macro level. Dig deeper and you’ll find that spending on hardware will decrease, and frankly you don’t need to be a ‘rocket scientist’ to figure that one out, but other sectors are doing reasonably well, such as SaaS, cloud computing, software and security.

I’m quoting a source here, i.e. the new CEO of Symantec, Enrique Salem, whose response to questions has been measured, they are logical and display to me why he is the CEO - and a good one at that. The problem is, is that the press doesn’t report so much on articles like this, you have to dig deep to find them – why? Because it isn’t as newsworthy as bad news. But then again, journalists are not noted for (again generally) being entrepreneurs.

So dig a little deeper and you will find good news.

There’s been much in the press recently about the G20 meeting last week and the potential outcome, which I have to say on balance, seems fairly positive.

One of the main issues was the need for further regulation of the banks and financial services sector in order to limit risk. I have always been a proponent of free market capitalism but I do also accept that Governments these days have a responsibility to their country and their electorate. Let me explain.

A couple of years ago, while we were seeking funding, I was discussing with a colleague, the opportunity (or lack of therein) that the banks might play. His view was that and I quote, ‘banks don’t do risk’. Frankly I wasn’t going to argue, I realised over the years that everyone is an economist! In my youth, I had been taught to avoid politics and religion simply because they are emotive subjects. Ironically, economics which is in the main is a ‘dry’ subject seems to now fall into this category.

But back to the point of risk. The markets need risk. Without risk there would not be any banks or financial institutions. That said, banks may wish to mitigate their risk but they still need elements of risk.

The G20 conference agreed that the financial services community now requires further legislation in order to regulate their ‘behaviour’ and further reduce the limits of risk to which banks can take. Therein lies the problem. I am not aware of any economic or financial model that allows for the way that people behave in a set of particular circumstances and as we have seen, people act sometimes irrationally or irresponsibly.

By limiting risk, it is more than likely that the financial returns will be greatly reduced hence the term risk vs. reward. Unfortunately while there is a danger of stifling markets and accepting that the term ‘caveat emptor’ no longer has a place in the free markets, it has to be said there needs to be some form of governance.

Forgive me while I prattle on but there is a point. While banks have been shedding staff they will be more compelled than ever to initiate specific (and potentially major) IT projects in order to become compliant with the new regulations, whatever they might be. Furthermore, this is happening now! Banks have learned their lesson (albeit in the short term) and will want to ensure that such a disaster doesn’t happen again, hence the reason why very few banks are lending or investing. So while there appears to be little opportunity within this sector, dig deep and you will find that there is or that there will shortly be one…

Finally, while there seems to be a little more optimism out there, remember this, people have short memories. There will another generation of people that will play the system, who will find ways around rules and regulations. We saw that with Barings Bank, with Enron, Worldcom etc. We have short memories and in 10 years time a number of people will take risks yet again in the hope of earning a huge bonus.

The problem is that while we can mitigate risk, we can’t mitigate greed.