Front Office Box

The avalanche has started.

What avalanche?  Big brands starting to use the Internet to reach, influence and create loyalty in their small business customers!

Several phenomena are merging.
1) Big brands can no longer control demand and supply through their distribution channels.  They’re being commoditised by Internet enabled competition.
2) Their big customers are disaggregating.  Knowledge workers are exiting the corporate structures to set up their own businesses.
3) Social networking and Conversational Marketing are creating new models for communication.
4)Customer expectations are moving from simple supply to value add.

For big brands the old rules don’t work so well anymore, and they’re having to find new ones that do. Their answer - Internet enabled value added services. Blog’s, Wikis, forums, applications.  All targeted at winning over the small businesses.

We saw it coming.  Through 2006, we were building our software, and figuring how the new Internet technologies would change the rules for businesses.  This wasn’t rocket science.  After all there’d been a number of seminal works published which showed the way.  Anybody who hasn’t read these books should invest some time doing so.  Their perspective on business and technology will change, fundamentally, and forever.

• The Long Tail http://www.thelongtail.com/
• The Tipping Point http://www.gladwell.com/tippingpoint/index.html
• The World is Flat http://www.thomaslfriedman.com/worldisflat.htm
• Wikinomics http://www.wikinomics.com/

The publications all, basically, say the same thing - Internet technology is letting the lunatics take charge of the asylum.  The world is now dominated by customers, and those big businesses, which used to dictate how we think, are now just transitory links in our individual supply chains.  Since the industrial revolution we’ve been forced to accept whatever garbage the big corporates handed out.  They’ve controlled the means of both production and distribution, until the Internet changed all that, forever.

Back in 2006

1. The Long Tail told us there’s almost infinite, unsatisfied,  demand for niche products and services
2. The Tipping Point told us the way to get to this demand was networking, not advertising
3. The World is Flat told us anybody can supply anything, from anywhere and the point of competition is value add, its not longer the distribution network
4. Wikinomics told us corporate structures are breaking down and individuals are creating their own value propositions, based on what they know as opposed to what they do

The technology that’s making all these realities is web pages - in blogs, wikis, forum, applications.  These allow individuals to communicate and share in unprecedented ways.  The marketing departments no longer control the messages, people do - witness the success of My Space, Facebook, Linked-In, etc..

We anticipated a permanent shift in the ways business software is built, supported and distributed.  We anticipated this shift would start in the small business sector (bigger businesses will get there eventually).  We anticipated the big brands would latch on to this new technology and offer it to customers, attempt to create value add and barriers to customer mobility - Stickiness.

Now it’s happening right in front of us, and it’s exploding.

In the UK one of the biggest and baddest has always been BT (formerly British Telecommunications).  For many years BT was the monopoly supplier of telephones and anybody wanting a phone would have to wait six weeks after placing an order.  Fortunately the government decided to remove the monopoly power over the supply of phone services.  Unfortunately it left BT as the monopoly supplier of infrastructure.  Regulation has continued to restrict BT’s ability to exploit its power (it’s still the market leader in domestic phone services) but the company fights a rear guard battle, confusing and abusing customers with changes in terms appearing to reduce prices whilst actually increasing them.

Where’s the relevance?  Over the last few weeks BT has released a whole raft of support functions for small businesses, including social networking, on line content, including business regulations and advice and guidance, user blogs, forums and even business applications.  Scary, well not really.  You see leopards never change their spots do they.
First off the software is horrible, ugly, complex and clunky.  Secondly the content is really thin.  Thirdly, while there appear to be free services, when used it’s obvious they don’t actually do anything.  You’ve guessed it - we need to buy the upgrade.

Typical, arrogant BT really.  Take a good idea, mix it up with a bunch of corporate IT “professionals”, and really screw it up.

January 2nd, 2008 - Posted in Business Software, Business on the web, Web 2.0  |  Add a Comment