Dennis Howlett's equation: Attention + composition = x2 revenue

Fellow Enterprise Irregular, blogger and IT/finance consultant Dennis Howlett offers a guest post on the state of business application software, connecting the dots between Erasure, Last.fm, social media, attention, Paris Hilton, James Governor, Jeff Nolan, Oracle, SAP, Freshbooks, thingamy, Eternal Recurrence, Sage, Infor, Larry Ellison and Marc Benioff.
Written by Dan Farber, Inactive

Fellow Enterprise Irregular, blogger and IT/finance consultant Dennis Howlett offers a guest post on the state of business application software, connecting the dots between Erasure, Last.fm, social media, attention, Paris Hilton, James Governor, Jeff Nolan, Oracle, SAP, Freshbooks, thingamy, Eternal Recurrence, Sage, Infor, Larry Ellison and Marc Benioff.

The refrain we hear in the business apps world is that stuff is becoming 'consumerized.' If only that were true. Over the weekend I discovered that in 2005 Erasure released "Don't Say You Love Me," a song you can modify, tweak and composite into a unique version, that you can then buy and download. It's such a cool idea they're able to charge £2 ($3) a pop which includes a piece of unique artwork should you choose to burn the tune onto CD. I didn't think twice. I bought two versions.

I wondered why I was prepared to fork over $3 for something I could approximate for £0.79-0.87 ($1.60-1.75) from Apple Music Store or Amazon. Two reasons. First, I was listening to last.fm when the track started playing and I found the information about the unique mix offering while trawling through last.fm's wiki entry for the band. Last.fm sent me away so I'd come back. I did come back. That's about the value of the 'everyone's a winner' attention economy, where users click away from sites with copious links then return because they see the originating site as a source for fresh information and renewed attention. 

Last.fm only earns income from music sales so retaining individual attention is critical to their financial success. Providing those all important outbound links to music stores, musicians' websites and other reference material gives the user an incredibly rich and valuable experience. One Last.fm hopes the user will wish to repeat  time and again...Coincidentally, I was reading about Paris Hilton, the queen of attention courtesy of a del.icio.us link from James Governor:   

What makes Paris brilliant is that she used the attention she had and gave it to others thereby garnering more attention for herself. And it’s been profitable.

Regardless of anything else I might say about Ms. Hilton's assets, she is a very smart person. James gets my attention for several reasons. First he's someone I know from the real world. Second, he's a smart wordsmith, something I always appreciate. Finally, while I know he works primarily for the vendor community, (are his words a higher form of subliminal advertising?) James provides me with a lot of interesting information plus copious links to other places--1,799 of them at the last count. Not all stories interest me but enough that I'm prepared to add James' del.icio.us network to my own.

The second reason I bought the songs was the ease with which I could composite my own version of the Erasure tune. I'm no creative musician so for someone to take 95% of the pain out of the creative process while giving me the tools to make something intensely satisfying has a value of x2 the alternative cost even though the Amazon variant is already heavily discounted from the 'real world' cost of purchasing a CD single. How I wish I could say the same about the world of business applications.

Today, I've got three choices. Take the same stuff everyone else has at packaged application pricing. Configure a packaged application to what I need or fork over a fortune to get customized business processes. Probably from SAP or Oracle. None of those choices is particularly appealing. I want an alternative that provides the utility I need but without the baggage I'm not interested in. That may not be so far away.

Last Friday, Jeff Nolan, CEO of Teqlo, a startup developing an application assembly environment, said:   

Contact management is not a business, it is a lever that is pulled to give utility to applications. For example, the emerging killer feature in gmail is the address book that is compiled as you use it, which is then repurposed to the other applications, like Calendar, to give Google a legitimate competitor to Outlook...

...I immediately saw a great opportunity to build some components that pulled data from and feed into BigContacts. This is where the “context” part of everything comes together because while BigContacts could build to the obvious opportunities such as a solution for real estate professionals, what about the less obvious ones like home inspectors who are also in the real estate vertical but need a unique solution?

He's absolutely right. I've long argued that in my trade, it is pointless giving everyone the same look and feel, data entry and view structures because every business segment has different needs and requirements. The answer that usually comes back is that users can tailor their reports to suit their needs. Wrong answer. I've got to have reached the end point of data entry to get to the information in the first place.
Many of the business services I see have enormous utility but where is the component-based accounting engine that might provide the backbone with which composite applications Jeff's company could remix? As far as I know, it doesn't exist. Freshbooks has had a pretty good stab at solving the sales side of the equation from an end user's perspective (no accountants required) but has yet to deal with the purchasing and expense elements. Great for service businesses in a relatively narrow niche but beyond that? I'm not sure. There is an alternative.

Sig Rinde's thingamy
lets businesses composite business models pretty much any way they choose. Sig leaves it to the developer to decide what he wants to do. A nice idea if you've got business modeling skills but not so good if you're a smaller business.
Ideas like Jeff's and Sig's are terrific, but they need dialogue with subject matter experts. Check out Eternal Recurrence and you'll see exactly what I mean. IMO, it's time for geeks to give serious attention to business. Social media is one of the best ways I know to kick start that process because discovery of relevant information is often just a mouse click away from any of the shared links an author chooses to include. From there, it is only a matter of following topics of interest through an RSS reader, which in my opinion provides the fastest way to sieve and digest information.

The good news is that Jeff and Sig have a head start on incumbent application vendors. They want to learn and are constantly hunting down new sources of knowledge, sharing what they find and pushing the boundaries of debate. Incumbent companies like Sage and Infor seem more concerned about giving attention to their maintenance revenue. No innovation required. No need to share.
In the meantime, I wonder if Oracle's marketing department is thinking of gaming Ms. Hilton's assets. After all, ringmaster Larry Ellison has gone awfully quiet of late. The business apps business could do with a new comedian showperson on whom we could lavish attention. I'm tired of Marc Benioff's hyperbole. And in any event, the idea that Oracle could game Ms Hilton with a one-liner like: 'Great ass gets a great ride with Oracle seems almost appropriate.

Dennis Howlett has more than 30 years experience in the wonderful world of IT related finance, including 10 year as a partner in a British firm of Chartered Accountants with a tax and IT remit. He currently lives in Spain, where he blogs and advises software developers about how they need to develop for customer needs and the requirement to understand the narrative in customer satisfaction. 

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