The smartest dumb idea around

every senior auditor I know is either losing sleep over his company's exposure to data theft arising from the use of laptops

A few years ago some Sun people spent time trying to sell this idea to British Telecom and a half dozen other telcos. The spiel went something like this:

 

Let us provide both the Sun Ray for home use and the back end processing services, you guys provide the DSL services and do the billing.

That way, for a few pounds a month the customer gets a completely hassle free home computing solution: no need to worry about backups, viruses, worms, or learn anything about software installation and support. They turn it on, log in, and do whatever they want - email, web surfing, word processing - whatever.

You sell more DSL services, lock in your customers, and make a margin on our gear, our services, and our technologies.

More recently the word "solution" has become poisonous in IT related proposals and two new talking points have been added to the pitch:

 

  1. We can seamlessly connect that home user to a work environment like a Microsoft client-server set-up, securing both halves of the communication channel - from us to the Sun Ray, and from the user's office systems to us - while freeing the user from having to lug a notebook around and completely side stepping any risk of data loss due to notebook theft or damage.

    That works for the home user, but it also works for the business user. A subscriber can go anywhere there's a network connected Sun Ray and find his data -meaning his whole collaborative and software environment- ready and waiting for him at sign-on -with no risk of loss and nothing to carry.

     

  2. Sun Ray supports teleconferencing and VoIP applications. Go this route now, and you keep that customer as VoIP and video conferencing go mainstream.

There's a potential new one too: a handheld built using Sun Ray technology and radio based networking would be a better Blackberry - enabling the telco to bundle in mobile access without worrying about the patents held by other players like NTP and RIM.

The technology is proven. Sun did a careful pilot study for its own Sun Ray at home project, and the results have amply demonstrated both the technology and the combined security and convenience benefits.

As a result You'd think this idea would have been a big seller from day one -but it hasn't been. Instead, I think they've made it to third base a couple of times, but I'm not aware of any current or pending implementations.

So why not? Most of the people I know that have home computers think they're a hassle, feel that their network access provider over charges for relatively simple services, and complain to me (because they know I'm a Unix/Mac bigot) about the need to use Microsoft Word to work on office documents. Meanwhile every senior auditor I know is either losing sleep over his company's exposure to data theft arising from the use of laptops or off in a world of his own where reality does not impinge. So here's a proven solution to both sets of problems that nobody's offering to sell -and, meanwhile AOL still has an active customer base sending it a monthly fee for a lot less.

I don't know for sure what the deal breakers have been on this. I've heard that at least one telco's own data processing experts responded with a customer survey built along the lines of "You don't want to use a Sun Ray, do you?" while another deal is said to have collapsed over money because the telco demonstrated a rather over enthusiastic view of what its communications monopoly might be worth, but I don't see those explanations as sufficient.

What I think is that there have been two killer issues:

  1. first, it's just hard to sell a new idea to a telco, and particularly a new idea about home computing where the executives are less than knowledgeable about technology and the technologists they rely on for advice generally want to know nothing about Sun Rays;

     

  2. and, more importantly: "faster, better, cheaper" would make a great slogan for a technical Olympics, but there's no hot button issue there for either your average jaded telco technology advisor or his CFO boss.

What's needed is a better idea - something that would make a telco's senior management team sit up and pay attention.

So here's my suggestion to the people trying to make this kind of sale: go partner with one of the larger, more business visible, banks in whatever country you happen to be working in and have that bank approach the telco. That way you have bankers talking to CFOs on your behalf and the whole socio-tech thing doesn't get in the way of the deal.

So how do you get the bank on-side? Talk to their top people (not their technologists) about credit card fraud, the explosion in business to consumer internet sales, and the opportunity to step out ahead of competing card issuers.

The basic pitch is dirt simple: the home Sun Ray user does not need an expensive Java Card (few users actually do) and the card reader on the home Sun Ray can therefore be replaced with a credit card stripe reader.

That makes all credit card transactions originated on that device, "card present" transactions. Such transactions usually carry a discount rate (what the vendor pays the bank) on the order of 2% in the US and usually a bit higher elsewhere. In contrast most web purchases today qualify as card absent transactions for which the typical charge starts at 3%. Similarly per transaction fees start at around $0.20 in the US (usually higher elsewhere) for card present processes and around $0.30 for card absent transactions.

Individually the numbers are tiny - for example about a hundred million on Amazon's 8.5 billion in annual sales - but the opportunities they represent are important. For example, although transactions costs (and therefore losses to fraud) are built into the business framework now, the bank's default decision to pass the savings along will give it serious competitive advantages first in selling card processing services, and secondly in attracting and holding merchant accounts. Equally importantly, the overlap between the bank's existing customer base and that of the telcos involved will not be complete - meaning that the bank at least is likely to gain new customers while positioning itself as doing something effective about the trust barriers to e-commerce.

This is an idea in which everyone wins: the Sun Ray cost actually goes down a bit, the banks get new customers and new revenues, and the telco executives involved get a business reason to do what they should be doing: creating a steady new revenue stream for their companies by offering fully managed home Sun Ray services.

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