Tuesday, September 25, 2012

Disruptive Innovation: how mobile alters the cab business

I was in Manhattan back in 2007 to build up Magnolia Americas. One of the first things I did when I got there was to buy the new iPhone (even before I had an apartment or an office). I met a lot of cool people and had to move around in taxies quite a bit, and naturally some day in Brooklyn (there are generally no cabs in Brooklyn) I thought about an App to order a cab or limousine. I am used to toying around new ideas and take them apart, build business plans around them etc, so I took it as a nice intellectual challenge but not more.

Fast forward to 2012, and these kind of Apps have arrived big time. We have recently switched to a new taxi company in Basel, and with it came an app that allows me to order a taxi and see where it is and how long it takes to get to wherever I am – the kind of app I imagined back in 2007. Naturally I started to ask the cab drivers how the business model around their enterprise works and how these apps change their life.

So let me step back a bit. About a year ago I did a workshop with the CMS Experts Europe Group of Janus Boye about Disruptive Innovation. It has become a bit of a hobby of mine to look for disruptive technologies. So naturally I was interested in the disruptive nature of the taxi app.

First, taxis usually work in two modes – you either hitch one driving by, or you order one to pick you up. In New York or London demand for taxis is high, so if you are a cab driver, it suffices to drive around a block and you will have a new guest. There is little incentive for them to go through a call center to be dispatched to a client. In London for instance, most cab drivers will not be connected to a call center (one friendly cabby estimated that  20% of London cabbies are enrolled in such a scheme there).

A call center however is useful in smaller places. Cities like Basel. A cab driver pays a monthly fee for the call center, and the call center dispatches taxies to clients. In Germany a cab driver pays e.g. 450 € (580 USD) per month to the call center in order to get a supply of clients. In Basel, the fee is nearly twice s much at 1000 CHF (1070 USD). The taxi drivers have little alternatives to the call center services to get business here.

Now enter the app. The app connects the client (me) with the cab driver circumventing intermediaries like the call center. I haven't researched their fee structures in detail, but from what I hear, for instance in Germany the cab driver pays about 1$ in fees per ride initiated through the app to the app provider. While this might not seem like a big money saver, its main value for the taxi drivers is that the fee is per ride.

In Germany, if you take a three week holiday, you still pay the monthly 580USD for the call center. If you only work part time, same thing. The call center, in other words, doesn't care if you work or not. The app however does.

And the taxi drivers seem to love the new way of doing business. First, if they just stop on the road and pick up a passenger, they will not have to pay anybody anything. Same for all sick times, vacations or other times they don't work. However, if they need to rely on a third party to get a guest, they just wait until the next request on their mobile comes in and pay 1$ for it. This is a great value proposition for them, and naturally in Germany, cab drivers are using the app pretty much everywhere. The call centers don't like it, but what can they do?

Well, in Switzerland, they simply forbid the use of the app independent of the call center. In other words, the app I use goes to the call center, they notify the taxi driver and dispatch her to me.

Is this the right approach? Will it save the taxi call centers long term? What should they do? Is there anything they actually can do?

The mobile and the taxi app are disruptive to the business of the call center. The "disruptive" part  means that it change the nature of how things get done. Unless you change as well, you will not survive. I understand that the Swiss taxi center tries to use their dominance to stem the tide, but I believe resistance is futile. Their dispatch service simply is no longer needed.

Let me end with a little story on Kodak and Fujifilm. Both companies at their heyday were quite comparable, one quintessential American, one Japanese film maker. Kodak actually invented the digital camera! Today, Kodak is dead (what a shame), Fujifilm is striving. Why?

They both new at about the same time that change was inevitable. The digital camera would be disruptive for their film business. Surprisingly, Kodak failed to act decisively and forcefully, whereas Fujifilm did. Let's skip an analysis of what Kodak did wrong (lot's of things for sure) in their demise. What did Fujifilm do? They basically said: film as we know it is dead. How can we apply our considerable knowledge, processes, relationships and intellectual property elsewhere? And they did come up with two interesting business ideas that they followed through with – one in cosmetics (turns out the human skin and film have similar needs and characteristics) and one in flat panel displays, where Fujifilm has developed a film that increases the viewing angle of the display which is market leading.

My advice to call centers: assume dispatching taxis to clients is a dead business proposition. What can you provide that will still be useful? Then act fast and decisively.

These days when I need a cab I simply download an app and press a button. Life has become much easier for this weary traveller. Where did you recently see the disruptive nature of mobile at work?

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Tuesday, September 18, 2012

Why Magnolia 5 is mobile first

At the Magnolia Conference 2012 we presented the first look at Magnolia five and stated that Magnolia  5 was developed with a mobile first approach. There were two drivers for this approach:
  1. We want to bring the ease-of-use of a smartphone to the desktop. If you compare today's bloated interfaces of enterprise software with the fun-to-use, task-oriented apps on your iPhone you will immediately realize the attraction of the latter. 
  2. But there is a second attraction to developing enterprise software from a mobile perspective: the fact that you can actually use the software on a mobile device! 
So our goal was not only to make Magnolia easier to use on the desktop, but also to fully enable the same experience on your tablet computer. There has been ample research into the subject matter in recent years, and here are some quotes I presented at the keynote that highlight where the journey is taking us.
Mobile knowledge workers currently account for more than 60% of the total workforce in Brazil, Germany, India and Japan and more than 70% of the total workforce in the United States – Infotrends Jan 2011
These numbers are already more than a year old, which in terms of the mobile revolution is like a decade in desktop computing. Even if the Europeans by and large work from desktop computers, the same is not true for the rest of the world, and in any case, it is changing rapidly, everywhere, because the advance of mobile also changes the nature of business, as the next quote highlights:
Mobile applications will drive major transformation in the way businesses operate by delivering … relevant information to employees and customers – Gartner: “Effects of Mobility on Information Management”
Now these have been two good quotes why we want Magnolia 5 to run on mobile. Here is one that fits our other motivation, ease-of-use:
(Apple's iPad is) changing user expectations for how they interact with their content management systems – Gartner: “Tablets and Smartphones Are Changing How Content Is Created, Consumed and Delivered”
As you probably realize by now, what we do is what needs to be done. The future of content management (and enterprise software in general) will not look like your desktop software from the 90s, and I think we can all agree that is a good thing.

I spoke to a close friend recently, who told me that their company's Asian workforce is now exclusively equipped with iPads. They are no longer equipped with laptops. Probably the foremost reason is the lower total cost of ownership. Whatever their exact motivation, the fact remains that there is a workforce of an estimated 4000 staff being equipped with iPads instead of laptops. This is the trend that we see. And that is why Magnolia five is built mobile first.

PS: I'll be in London the next few days at the Gartner Portals, Content & Collaboration summit. Feel free to touch base with me there.
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Tuesday, September 11, 2012

Magnolia 5 – CMS as mobile apps platform

In the keynote (slides) at last week's Magnolia Conference Pascal and I spoke about Magnolia 5 and how we believe our CMS is an excellent starting point to develop mobile apps. For those that didn't make it to the conference (you missed a great event) let me quickly try to lay down my thoughts about the topic in this blog post.

So, Magnolia 5 aims to be the first CMS on the market that is "mobile first". That means that we have rethought and rewritten how content management should work in our mobile age. One aspect of it is that interaction patterns have been inspired by iOS, i.e. the iPhone and iPad. Another aspect is that the full CMS functionality will be available on the iPad and other tablets. With regard to interaction, our approach to reduce the complexity typically found in enterprise software, and to improve usability, is to use Apps as the building blocks of the CMS.

For a start, we provide an Apps Screen that allows you to launch the Apps you have access to. Additional apps can be added via Magnolia's module mechanism. Now, the big questions is why you should use Magnolia to write Apps.

Magnolia really is a UI on a broad set of services – we call them core services. For instance: 
  • repository storage
  • publishing / STK
  • scalability
  • security
  • data import
  • caching
  • observation
  • workflow / BPM
... and many more. If you think about it, many of these core services would be really useful when writing Apps for your mobile workforce (we call them Mobile Professionals or MoPros). Certainly the fact that Magnolia solves the provisioning issue is helpful (simply access Magnolia through the web browser of your device, log in, and you have access to all Apps you are allowed to use).

The security aspect is also interesting: Magnolia has user management that integrates with your organization through standards (JAAS) and has field level access controls in place.

Further, if as a MoPro you need to capture data (e.g. you are selling insurance policies), that data certainly should go back into some central form of storage – and we have that, using a standardized repository. If you then wish to publish, enrich or aggregate said data, Magnolia again is your friend.

Now, building these Apps is straightforward. We have defined a specific "content app" class that you can use as the basis for, well, content Apps. Content Apps basically allow you to manage any form of data or content through a standardized UI. All you need to do to create such an App is to define the data type. The UI will be rendered fully automatically.

On a lesser abstraction level, you have full control over your Apps (which means more work for you) but for straightforward Content Apps, Magnolia 5 indeed brings a lot to the table.

Apps can also use workflow (we will use jBPM in Magnolia 5), or use observation to react on any changes to any content.

So once you put all of this together, you probably agree that using a CMS like Magnolia provides excellent benefits to your organization if you want to provide access to corporate data for your mobile professionals. In any case, we fully embrace the mobile age and are excited that we are entering the Mobile App platform space with Magnolia 5.

You can download a developer preview of Magnolia 5, watch the fantastic teaser videos or read the docs on how to write a Magnolia 5 App. We plan to release a Magnolia 5 beta in November, so stay tuned for more.

And let me know what you think about the Apps platform idea.