Teknopol Innsights » Ants Maran

Software is eating the world

Ants Maran — Sat, 20 Aug 2011 11:15:36 +0000

This article is so good so I’ll stay away from writing any addition:

“This week, Hewlett-Packard (where I am on the board) announced that it is exploring jettisoning its struggling PC business in favor of investing more heavily in software, where it sees better potential for growth. Meanwhile, Google plans to buy up the cellphone handset maker Motorola Mobility. Both moves surprised the tech world. But both moves are also in line with a trend I’ve observed, one that makes me optimistic about the future growth of the American and world economies, despite the recent turmoil in the stock market.”

“In short, software is eating the world.”

“More than 10 years after the peak of the 1990s dot-com bubble, a dozen or so new Internet companies like Facebook and Twitter are sparking controversy in Silicon Valley, due to their rapidly growing private market valuations, and even the occasional successful IPO. With scars from the heyday of Webvan and Pets.com still fresh in the investor psyche, people are asking, “Isn’t this just a dangerous new bubble?” I, along with others, have been arguing the other side of the case. (I am co-founder and general partner of venture capital firm Andreessen-Horowitz, which has invested in Facebook, Groupon, Skype, Twitter, Zynga, and Foursquare, among others. I am also personally an investor in LinkedIn.) We believe that many of the prominent new Internet companies are building real, high-growth, high-margin, highly defensible businesses.”

“Today’s stock market actually hates technology, as shown by all-time low price/earnings ratios for major public technology companies. Apple, for example, has a P/E ratio of around 15.2—about the same as the broader stock market, despite Apple’s immense profitability and dominant market position (Apple in the last couple weeks became the biggest company in America, judged by market capitalization, surpassing Exxon Mobil). And, perhaps most telling, you can’t have a bubble when people are constantly screaming “Bubble!” But too much of the debate is still around financial valuation, as opposed to the underlying intrinsic value of the best of Silicon Valley’s new companies. My own theory is that we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy.”

“More and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defense. Many of the winners are Silicon Valley-style entrepreneurial technology companies that are invading and overturning established industry structures. Over the next 10 years, I expect many more industries to be disrupted by software, with new world-beating Silicon Valley companies doing the disruption in more cases than not.”

“Why is this happening now?”

“Six decades into the computer revolution, four decades since the invention of the microprocessor, and two decades into the rise of the modern Internet, all of the technology required to transform industries through software finally works and can be widely delivered at global scale.”

“Over two billion people now use the broadband Internet, up from perhaps 50 million a decade ago, when I was at Netscape, the company I co-founded. In the next 10 years, I expect at least five billion people worldwide to own smartphones, giving every individual with such a phone instant access to the full power of the Internet, every moment of every day.”

“On the back end, software programming tools and Internet-based services make it easy to launch new global software-powered start-ups in many industries—without the need to invest in new infrastructure and train new employees. In 2000, when my partner Ben Horowitz was CEO of the first cloud computing company, Loudcloud, the cost of a customer running a basic Internet application was approximately $150,000 a month. Running that same application today in Amazon’s cloud costs about $1,500 a month.”

Android-First!

Ants Maran — Wed, 06 Jul 2011 09:00:50 +0000

The starting point of LBS wasn’t the release of iPhones, there where a lot of geeky stuff around before. But the explosion and exploitation of location as part of our Smartphone experience within apps came with the rapid growth of iPhone sales. It’s indisputable the number one gadget to create mainstream usage of LBS and who thought there would be a shift?

Last year we saw Google’s Android coming from nowhere and today it’s the dominating OS for Smartphones, but the flood of LBS apps hasn’t been as creative and fast growing as it was on Android; instead it is almost like two religions popped up. Pro iOS (now incorporating the iPads and iTouch as well) and Pro Android. Either or. Which is kind of stupid and stone age, think if someone said today “no, I can only use a Philips TV!”?

Anyway it has been a very strong trend for mobile service developers to first go iOS and then maybe Android if they could muster the challenge of moving to another platform (which means – is there enough money?). The standard analysis is that the consumer segments that run after iOS devices are not the same as the Android buyers. Arguments like these are common:

“they know it’s an iPhone they want while the ordinary consumer don’t know what Android means”

“The status of an iOS device is so much higher than of an Android device”

“iOS is for design people and Android is for Tech people”

These statements could be true, I doubt it, and I think all of this is now changing. A really interesting sign came today with Foursquare announcing that they will go Android first with their updated check-in LBS app. The pure amount of Android devices (independent if user knows Android or not) and the spread to continents, consumer groups and Smartphone models leads to the logical decision.

If it’s going to continue? I think so as long as the sales and activation of Android OS models continue. I’ll leave it to others to decide if it’s bad religion .

Mobile value

Ants Maran — Sun, 03 Jul 2011 16:49:57 +0000

With social networks and search going mobile the location comes into play for consumers all over the globe. It’s no longer who you are connected to its more and more who and where, the possibility to engage IRL, In Real Life, as an important functionality.

So the common ads that we are now used to see in the search and social network pages are less and less relevant unless they also tap into the location of where the viewer is using the service.

But then comes an interesting effect which Maartje Wouters, Interactive Marketer at Wecanbeheroes, reveals in her book ‘Location-based Services, from hype to hyper’. The consumer doesn’t see ads as enough, 63% think that mobile coupons are the most valuable form of mobile marketing.

So it’s obvious that GroupOn has some serious problems in customer acquisitions with skyrocketing costs and a constant? need for new investments; could that have anything to do with the fact that they aren’t a social network or search service?

In the light of Google+ launch and what seems to be coming from Facebook, it might be relevant to also look at what Maartje Wouters lists as the six key drivers for mobile marketing value:

Location search marketing: search engine marketing based on location is one of the most significant developments in location-based advertising.
Gamification: it is expected that playing games on smartphones and tablets which are linked to location information are becoming more popular.
Geospatial networking: More and more social networks are being equipped with location information which makes it possible to communicate with people in your close vicinity.
The use of sensors: Smartphones are being equipped with more and more sensors, which can measure an array of metrics, such as temperature or energy use. This information can be combined with location information.
Indoor navigation: The combination of different location techniques will make it possible to give more accurate and detailed information about a person’s location in the future. This creates opportunities for indoor navigation and advertising.
Virtual money: Mobile payments will have a huge impact on the way we perceive money in general.